This audio is automatically generated. Please let us know if you have any comments.
Dive brief:
- Phoenix is the top U.S. growth market for manufacturing construction, with the most new major projects and new jobs projected, according to New York City-based real estate firm Newmark Group. it’s january Manufacturing Momentum report they surveyed domestic manufacturing announcements totaling at least $100 million from 2020 through the third quarter of 2023.
- The Phoenix metro area saw 14 major manufacturing announcements during that period, while Atlanta had the second most with seven megaprojects, followed by Austin, Texas and Detroit with six each. The new Phoenix facility is expected to create nearly 15,500 advanced manufacturing jobs.
- As federal funding of the $52 billion 2022 Chips and Science Act According to the report, more than 160 US jurisdictions will get at least one new manufacturing facility. The range of multi-million dollar investments from biotech facilities and chip plants to electric vehicle battery factories and clean energy projects.
Diving knowledge:
Big manufacturing projects are springing up around where they have the labor to do it, Newmark Group found. Different stages of manufacturing operations (research and development, pilot plant, and mass production) require different types of labor and should be located accordingly.
R&D facilities are usually smaller and located near specific talent, such as universities, but at the mass production level, they require a large amount of labor and access to a source abundant energy. Locations with affordable land, lower construction costs, favorable tax structures and financial incentives are the most attractive for this type of manufacturing facility project, according to the report.
The domestic manufacturing sector has been growing across the country since 2020, the report said, when the COVID-19 pandemic strained supply chains and exposed vulnerabilities.
“Companies’ desire to bring operations closer to consumption, especially post-pandemic, has been a clear driver of sizeable gains in the sector-specific labor market since 2020,” the report says.
Even before the pandemic and new federal funding, Phoenix’s stable climate, low utility costs and business-friendly environment attracted a rebound in the industrial building over the past seven years, contributing to its nickname “Wall Street of the West.”
Phoenix construction market volume however, a 13.4% drop is expected this year, driven mainly by the residential sector. Contractors in the area have also reported difficulty finding enough labor, forcing them to bring in workers from California, as well as concerns about water availability.
