By The Council of Economic Advisers (CEA) released a report outlining a noticeable turnaround in the United States industrial landscape. After years of offshoring and stagnant factory growth, the latest economic data from 2026 presents a compelling story of reindustrialisation.
Driven by aggressive trade policies, full expensing tax provisions, and targeted tariffs, American manufacturing is undergoing a significant structural expansion.
From soaring factory construction to record-breaking export figures, the numbers point to a structural shift in how and where physical goods are produced for the American market.
A Reversal in Factory Employment and Real Wages
The report highlights a clear departure from the industrial contraction experienced in recent years. During the final two years of the previous administration, over 200,000 manufacturing jobs shifted overseas. In contrast, the manufacturing sector entered its ninth consecutive month of expansion by September 2026, adding 72,000 jobs year-to-date.
This recovery has been led by heavy production and durable goods, which saw an influx of 101,000 positions, notably within primary metals (+21,000) and transportation equipment (+17,000).
Average Monthly Manufacturing Job Growth / Loss
2023: -2,000 (Loss)
2024: -15,000 (Loss)
2025: -9,000 (Loss)
2026: +8,000 (Gain)
At the same time, tight labour conditions and expanding production lines are driving up worker compensation. Nominal wages for manufacturing workers have risen 7.9% since January 2025. When excluding managerial staff, nominal gains hit 9.2%.
Adjusted for inflation, production and non-supervisory manufacturing workers earn nearly $2,500 more per year in real terms. Construction workers have seen real annualized gains of $2,883, which rises to $3,824 when managers are excluded.
Tax Incentives and Capital Investment Spark a Construction Surge
A central catalyst for this industrial resurgence is the tax framework under the One Big Beautiful Bill (OBBB) and associated capital expensing rules. By allowing businesses to immediately deduct the full cost of factory upgrades and machinery purchases, manufacturers across the country are unlocking previously shelved expansion projects.
- Ketchie Inc. (Concord, NC): Expanded its workforce by 25% following the acquisition of a dual 5-axis machining centre, EDM machine, and cylindrical grinder after OBBB passed.
- Jergens (Ohio): Utilized full factory expensing to expand facilities into Illinois, with 83% of hourly employees volunteering for overtime under tax-exempt overtime provisions.
- Munson Boats (Washington): Restarted a deferred 6,000-square-foot facility expansion, adding 15 new positions.
- Vermeer Corporation (Iowa): Unlocked multi-million-dollar machining purchases with plans to add up to 200 jobs.
This influx of corporate investment is visibly transforming the physical landscape. Non-residential specialty trade construction added more than 111,000 jobs since early 2025, reflecting a steady ramp-up in heavy industrial construction.
Cumulative Gain in Factory Construction Jobs (Since Jan 2025)
Q1 2025: 9,300
Q2 2025: 19,500
Q3 2025: 26,100
Q4 2025: 31,800
Q1 2026: 54,600
Q2 2026: 77,000
Q3 2026: 110,800
Overall real private fixed investment surged at a 6.9% annualized rate during the first half of 2026, up from 2.3% in 2024. Major commitments include Micron’s $250 billion memory chip plants, Apple’s $600 billion U.S. investment plan, GSK’s $30 billion R&D and manufacturing commitment, and Stellantis’s historic $13 billion automotive expansion.
Federal Reserve Data Confirms Output Acceleration
Broad macroeconomic indicators back up the labour and investment figures. The S&P Global U.S. Manufacturing PMI hit 55.9 in September 2026—marking 14 consecutive months of output expansion.
Industrial Production Growth Comparison (YoY)
Sector | Q4 2024 (Biden) | Q2 2026 (Trump)
—————————–|—————–|—————–
Semiconductors & Circuits | +13.0% | +21.0%
Business Light Vehicles | +6.0% | +21.0%
Computer & Electronics | +4.0% | +9.0%
Aerospace & Transport | -4.0% | +7.0%
Machinery Manufacturing | -4.0% | +5.0%
Data from the Federal Reserve Board demonstrates widespread acceleration across critical sectors:
- Semiconductors & Printed Circuit Boards: Output jumped 22% year-over-year.
- Business Vehicles & Transit Equipment: Commercial vehicle production climbed 16.1%, while public transit equipment reversed a 18.4% decline to grow by 11.2%.
- Defence & Aerospace: Defence manufacturing accelerated to 7.1% year-over-year, while broader aerospace output pivoted from a 9% contraction into 4.2% growth.
Trade Balance Shift: Record Capital Goods Imports and Output Exports
The structural transformation is also reshaping American foreign trade patterns. U.S. goods exports reached an all-time monthly record of $220 billion in April 2026, tracking 15% higher overall compared to 2025. Key export drivers include computer accessories (+52%), computers (+46%), nonmetallic minerals (+209%), and aluminum (+34%).
Key U.S. Exports YoY Growth (2025 vs 2026)
Computer Accessories : +52%
Computers : +46%
Aluminum : +34%
Semiconductors : +26%
Industrial Supplies : +26%
Concurrently, import dynamics reveal an economy re-tooling its production base. Consumer goods imports plummeted by 20%, whereas capital equipment imports—the essential machinery and infrastructure required to run modern automated factories—soared to record highs.
Capital goods imports excluding automotive jumped 39%, led by a 95% surge in imported computers, 84% in semiconductors, and 37% in specialized mining equipment.
Rather than importing finished consumer goods, American supply chains are importing capital equipment to manufacture finished goods domestically.
Looking Ahead
With durable goods real GDP expanding past 6% year-over-year and real fixed private investment outpacing recent historic averages, the evidence points toward a sustained reindustrialization process. While global supply chains remain dynamic, the combination of regulatory incentives, tax policy, and protective tariffs has laid the groundwork for a broader domestic manufacturing footprint.
