Federal Reserve Board research maps manufacturing plant construction pipeline and finds most planned projects start within a year

The Federal Reserve Board published a FEDS Note using project-level data on manufacturing plant plans and construction starts to assess the recent boom in U.S. manufacturing construction. The analysis finds that a surge in planning activity preceded the rise in construction starts and manufacturing structures investment, while a large and growing pipeline of projects remains in planning amid volatility and cancellations. Using Dodge Data & Analytics microdata covering more than 20,000 projects since 2019, planning starts were low in 2019–2020, surged in 2021, peaked around the August 2022 enactment of the CHIPS and Science Act (CHIPS) and the Inflation Reduction Act (IRA), and then eased before a recent rebound. Construction starts increased from late 2021 and peaked around 2022, with that peak largely driven by projects planned before CHIPS and the IRA. Weighted by project value, around 75% of starts moved from plan to construction in under a year, about 10% took 1–2 years, and virtually none exceeded three years; the value of abandoned projects spiked in early 2022 and remained volatile. After accounting for new plans, scope changes, abandonments, and groundbreakings, the stock of projects in planning rose sharply and accelerated after CHIPS and the IRA, but the share of plans less than one year old has fallen since mid-2023 as new planning slowed. The note highlights uncertainty over whether the increasing share of older plans signals future abandonments or a backlog that could sustain elevated manufacturing construction, and calls for continued monitoring of planning activity as a leading indicator of nonresidential structures investment.