Spending on construction or renovation of factories is up 12 percent in 2014 compared to being virtually flat in 2013, according to Census Bureau figures and a recent article from USA Today. That 12.6 percent surge in spending on nonresidential structures was a big reason for the upward revision of second quarter economic growth. The Commerce Department said the economy expanded at a 4.6 percent annual rate, up from its previous 4.2 percent estimate and the strongest growth in 2 ½ years.
An auto sales boom, the housing recovery and the oil and natural gas drilling frenzy are all forcing manufacturers to build or enlarge plants to supply these industries. Factory output is up 3.2% so far this year after rising 2.6% in 2013.
Manufacturers are stepping up output and introducing new product lines, which often requires expanded facilities. Additional factory space is almost always followed by more hiring, according to Dan Meckstroth, chief economist of MAPI. Manufacturing employment is up by 105,000 so far this year, compared to a increase of 88,000 for all of 2013.