Construction of manufacturing facilities has been trending up. The $39 billion allocated by the CHIPS Act to build semiconductor manufacturing plants means the boom is likely to continue. With demand high, big builders are finding that trade partners who bring electrical, plumbing and mechanical expertise to the work are critical for success.
Modern Day Industrial Revolution?
There is so much action around manufacturing that it is indeed being referred to as the modern day industrial revolution. As Construction Dive reports, builders across the country are trying to figure out how to get in on the action:
Manufacturing activity accounted for nearly 35% of year-over-year growth in overall construction spending in February, according to Anirban Basu, ABC chief economist. The sector was almost solely responsible for all nonresidential construction spending growth in February, reaching $140.67 billion, according to Associated Builders and Contractors. Economists expect manufacturing projects to remain in high demand in the U.S. as more American companies push to onshore their facilities, largely due to the CHIPS Act. For example, manufacturing spending recently surpassed highway and street spending for the first time in more than 20 years, according to Census Bureau data. That’s even despite funding boosts from the $1.2 trillion Infrastructure Investment and Jobs Act.
Industry leaders, such as Jim Brownrigg of Turner Construction observe that among the complexities of construction for manufacturing currently is the need for “significant mechanical and electrical infrastructure.” Because not every builder has this expertise, trade partners are in high demand. For example, Brett Strength of Missouri-based JE Dunn, has found that early engagement of trade partners has been essential for success on builds for the manufacturing of electronic vehicle batteries and consumer products, and points out: “Mechanical, electrical and plumbing, along with sitework, concrete and steel, are the major components in the overall budget….When they are involved early, trade partners can work alongside us, in a design-assist fashion, to fast-track design packages for long-lead equipment.” According to Strength, securing the expertise of trade partners early on also contributes to keeping costs in check and eases the labor challenges.
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Following The Money
First round applications are already underway for slices of the $39 billion included in the CHIPS and Science Act for semiconductor manufacturing. Leaders expect a multitude of direct and indirect opportunities for builders as a result of the sweeping public vision behind CHIPS. Although jump starting manufacturing is the first push, the action won’t stop there. As Gina Raimondo, Secretary of the Commerce Department explains:“Our success will be short-lived if we focus only on manufacturing….The $39 billion in incentives will bring semiconductor manufacturing back to the U.S., but a robust R&D ecosystem will keep it here.” In addition to the construction of manufacturing plants, builders can anticipate projects aimed at standing up research and development facilities—in real time. Construction Dive reports that by 2030 the goal is to have “two large-scale clusters of semiconductor fabs.…Each cluster will include a surrounding supplier ecosystem, R&D facilities and specialized infrastructure.”
Across the country, builders are meeting the future with expanded capabilities via The Partnership Account® from Colonial Surety. You’ll receive free insights and financial scores just for completing a pre-qualification. Then, once qualified, leverage The Partnership Account® for a surety line of credit—in writing—and a private digital dashboard. Use it to access real time financial intel, including a day to day snapshot of single and aggregate limits and current and available bond capacity. Go ahead: update work on hand, increase your aggregate and move that next project forward.
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