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IPC COMMUNITY 8 SPRING 2024 INDUSTRY INTELLIGENCE By Shawn DuBravac, IPC Chief Economist Electronics manufacturing is driving a massive surge in manufacturing investment In the early months of the pandemic, invest- ment in manufacturing infrastructure, such as plants and production facilities, declined sharply. Real investment dropped over 11%, before finally recovering to pre-pandemic levels in the first half of 2022. Over the past two years, however, several factors have combined to drive manufacturing investment to record levels. In 2023, manufacturing investment in plants and other production facilities in the United States rose nearly 63%, the biggest yearly gain since 1951. This surge in investment underscores an unparalleled con - fidence in the growth potential of the U.S. manufacturing sector that looks beyond any short-term variability. Several factors are c o n t r i b u t i n g t o t h e increase in manufacturing construction spend- ing, including: 1. Government incentives: Three major legis- lative acts enacted in 2021 and 2022—the Infra- structure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduc- tion Act (IRA)—are propelling the increase in manufacturing construction spending by allo- cating hundreds of billions of dollars of incen- tives to the sector. 2. Technological advancements: The integra- tion of new technologies into manufacturing processes, such as automation, robotics, and artificial intelligence, necessitates the con- struction of modern facilities equipped to han- dle these advancements. 3. Supply chain resilience: The pandemic high- lighted vulnerabilities in global supply chains, prompting companies to invest in domestic manufacturing facilities to ensure more resil- ient and reliable supply chains. GROWTH POTENTIAL

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