Market research firm, Interact Analysis, sent this analysis of factory construction in the United States, Why has US reshoring not translated into meaningful factory construction? Written by senior analyst Matthieu Kulezak, the research notes that following a wave of investment from 2020 to 2024, the momentum is clearly fading “with leading indicators pointing to a sharp slowdown of new project activity.”
One of the clearest signals comes from the Index of Business Applications for Manufacturing Facilities. While applications fluctuated at elevated levels throughout 2024, momentum weakened significantly in early 2025. Total applications fell by 39.1% year-on-year in May 2025, for example.
As one of several indicators informing our forecast, the slowdown in new project applications points to a weaker pipeline of upcoming factory builds. We have, therefore, revised down our outlook for new factory construction in the US. The slowdown in new project applications signals reduced momentum in greenfield development, which is now feeding through into our forecast. As a result, our Q1 2026 forecast shows a much sharper decline in activity, with indexed growth falling to 76.0 in 2026, compared to 105.9 in our previous Q4 2025 view.
The first Trump administration made a concerted effort to force companies to return manufacturing to the US—or, at least, move from China. The Biden administration had similar goals using different tactics. The second Trump administration showed even more aggression in that regard through selective use of tariffs and personal “conversations” with prominent CEOs. Not to mention Harry Moser’s Reshoring Initiative that tried to use media to persuade company executives of the value of manufacturing here.
This sharp contraction in new manufacturing applications stands in contrast to the prevailing narrative around reshoring and near-shoring. While policy support and strategic intent remain strong, the data suggests that this has not translated into a sustained pipeline of new factory construction. Instead, companies appear to be delaying or scaling back new investments in response to macroeconomic uncertainty.
The rate of factory construction dipped significantly in 2025, with 2026 so far showing a similar trend. The inflation-adjusted index rose sharply from around 5,500–6,000 between 2017 and 2020 to a peak of 12,070 in December 2023, reflecting strong investment in large-scale factories. However, momentum reversed in 2024, with year-on-year declines exceeding 20% in multiple months. This weakness continued into 2025, with construction values falling 10 to 19% year on year and stabilizing at around 11,200–11,600, well below peak levels.
While factory application counts could suggest that fewer but larger facilities were still being built, the decline in total construction value shows that large-scale projects are also slowing. Because this metric reflects the total size and capital intensity of factories under construction, it confirms that overall manufacturing capacity expansion has weakened, not just small facility construction.
Rising demand for manufactured goods in the US is being met by higher utilization rates and brownfield expansion, not new factory construction.
The decline in new factory construction does not mean U.S. manufacturing is weakening. The U.S. already has a large and mature manufacturing base, so rising demand is increasingly met by expanding existing sites and increasing throughput rather than building new facilities. This is reflected in capacity utilization, which recovered from 62.5% in April 2020 to around 77–78% in 2021–2022. Although it softened in 2024, utilization stabilized and increased through 2025, rising from 74.5% in January to around 75.5% by December.
I’ve seen this following thought enacted by a few recent announcements of investment in current facilities.
An increase in production capacity or reshoring does not necessarily mean a new factory is being built. In many cases, what is described as a “new factory” is actually an expansion or repurposing of an existing site.
For example, John Deere’s announced excavator facility in Kernersville, North Carolina, is a $70M expansion of an existing campus, not a greenfield factory. The site brings production previously carried out in Japan into an existing U.S. facility and adds around 150 jobs, but it reflects capacity relocation and expansion rather than the creation of a new standalone factory. This distinction is important when analysing manufacturing growth. Output can increase through expansions, automation, or relocation without increasing the total number of factories. As a result, reshoring and investment announcements may signal higher domestic production, but they don’t always correspond to growth in the physical factory count.
