The U.S. manufacturing industry is undergoing a significant renaissance, indicating a shift toward a more advanced and sustainable domestic ecosystem. There is a renewed energy behind “Made in the U.S.A.”

Technology Plays a Key Role in Manufacturing Sector’s Recent Resurgence
Technology Plays a Key Role in Manufacturing Sector’s Recent Resurgence

Ken Naughton, President | Management Controls

The U.S. manufacturing industry is undergoing a significant renaissance, indicating a shift toward a more advanced and sustainable domestic ecosystem. There is a renewed energy behind “Made in the U.S.A.” as the government reinvests in the country’s manufacturing sector.

This onshoring momentum is being driven by three substantial pieces of federal legislation signed into law in 2021 and 2022:

  • The Infrastructure Investment and Jobs Act (IIJA)
  • The Inflation Reduction Act (IRA)
  • The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act.


These laws prioritize rebuilding national infrastructure, bolstering the domestic semiconductor industry, and advancing clean energy initiatives in the United States.

Deloitte reports annual construction spending in the manufacturing industry as of July 2023 was $201 billion—a 70% year-over-year increase. Tapping the right technology will drive continued, substantial transformation in this burgeoning era of domestic manufacturing.

To achieve success, manufacturing industry leaders must keep track of workers, including contractors, to ensure projects are on time, meet budgetary constraints, and adhere to safety protocols. Further, some government-provided tax credits and incentives require receipt or proof of this detailed information, most of which can be tracked through worker-related data management software.


Government programs motivate onshoring

Significant incentives are available to American businesses investing in the country’s manufacturing industry. Here’s a brief rundown of the big three:

  • The IIJA includes approximately $550 billion in investment in America’s roads and bridges, water infrastructure, resilience, internet and more. Its intent is to grow the economy, enhance the country’s competitiveness, and create jobs.


  • The IRA provides $500 billion in new spending and tax breaks to boost clean energy, increase tax revenues, and reduce healthcare costs. It incentivizes companies to meet prevailing wage and apprenticeship requirements with an investment tax credit of up to 30% of qualified investment projects. However, the continued challenge of finding skilled labor adds a layer of complexity to this perk. Business leaders who want to qualify for these incentives should consider software solutions that can help keep track of the required data.


  • The CHIPS Act sets aside $52.7 billion for research, development, manufacturing, and workforce development to support the industry. This includes a 25% investment tax credit available for capital expenses for the manufacturing of semiconductors and related equipment in the United States.


What’s driving the decision to invest billions in the country’s resiliency? The global pandemic reminded us of our dependence on other countries – especially China and Taiwan – to manufacture products necessary for the economy to thrive. It’s hard to forget the shortage of everyday items due to the lack of microchips during the height of the pandemic—think automobiles, household appliances, and consumer electronics.

However, despite significant investment into the industry, a persistent labor shortage exists. The Manufacturing Institute (MI) and Deloitte project the industry will need to fill four million jobs by 2030, more than half of which could go unfilled if the U.S. workforce pursues other job opportunities and/or ages out. Manufacturers will need to rely on a significant base of contractors—already a familiar practice for the sector.


Real-time insights provide value                                                         

Recent legislation has clearly prompted change and growth in the domestic manufacturing sector. For instance, factory construction in the United States has nearly doubled in a year’s time—everything from clean energy to liquified natural gas to data centers to electric vehicles. Many facilities will even have their own water treatment and power plants. And since a labor shortage in construction persists, sub-contracting work can help organizations expand and grow during this boom.

However, keeping track of on-demand talent can be challenging without the right technology. Contract labor-specific management platforms empower companies to track labor, equipment, and materials expenses more efficiently. Without such technology, manufacturers often operate in the dark.

As domestic factory construction continues, manufacturers’ capital expenditure (CapEx) will likely come under the microscope. Leaders overseeing such projects will find value in taking a closer look at CapEx especially since the CHIPS Act provides a tax credit to those manufacturing semiconductors and equipment associated with them. With this lens, it becomes more important than ever to know where resources are being spent and how costs can be cut.

Manufacturing- and labor-specific management technology can track CapEx and provide real-time insights, increased transparency, and time-saving automation to reduce significant costs.


Workers’ wages and rates tracking simplified

Because of the IRA, nuclear energy is another manufacturing vertical undergoing significant momentum. According to the Office of Nuclear Energy, the production tax credit to help preserve the existing fleet of nuclear plants is a game-changer.

Specifically, the zero-emission nuclear power production credit delivers as much as $15 per megawatt-hour for the electricity produced by the plants if labor and wage requirements are met. Technology can track the data containing wage-rate benchmarking to simplify tracking workers’ wages. It can also produce and automate this information flow to the appropriate parties, so companies receive the credit they are due.

The nuclear power production credit is available for facilities in service in 2024 through 2032, keeping existing reactors competitive with other power generators. The IRA also incorporates tax incentives for clean energy technology like advanced nuclear reactors.


Proudly Made in the U.S.A.

One thing is clear, the United States is making a manufacturing comeback and strengthening its position as a global leader.

How can manufacturers better equip themselves to take advantage of the myriad incentives offered through the IIJA, IRA, and the CHIPS Act? Technology is key when tracking everything from proving workers are paid prevailing wages to showing capital expenditures for building new or expanding existing factories.

To take advantage of these tax credits and other incentives, manufacturers must invest in the right technology to track their initiatives related to labor, CapEx, and more.


The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow

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