In today’s construction news, discover that spending on construction has increased since the early to mid-2021 start of the boom. A year or so later, in July 2022, Congress approved a package of subsidies for several manufacturing sectors to establish factories. These sectors include semiconductor manufacturers, which will receive $52 billion in subsidies, and EV battery makers. On the other hand, projects in Lodging Econometrics’ (LE) most recent Construction Pipeline Trend Report for the United States reveal the top five markets with the largest hotel construction pipelines as of the end of the third quarter. Finally, the final major building project in Pyeongtaek for the movement of American troops from Seoul to the south of the Han River was completed with a single stroke of a pen by the Republic of Korea and the United States. On November 30,2023, at Osan Air Base, a bilateral ceremony transferred ownership of the program’s last facility—a new chapel—from the ROK Design and Construction Agent (DCA) to their American equivalent.
The US Factory Construction Boom Is Incredible
Original Source: The Eyepopping Factory Construction Boom in the US
In October, $18.5 billion was spent on US manufacturing plant building ($246 billion yearly), increasing 73% from a year earlier, 136% from two years earlier, and 166% from October 2019. From $12.5 billion in January to $18.5 billion in October, the monthly gains are staggering.
Since the construction boom began in early to mid-2021, spending has increased. Congress passed a $52 billion package of incentives for semiconductor and EV battery manufacturers to build plants a year later, in July 2022.
However, government permits and fund payments for huge projects take time, so these government monies would only trickle in 2023. Still coming: the bulk.
Factory building spending may reach $200 billion in 2023. The growing monthly amounts surpassed $159 billion in the first 10 months. If November and December match October, spending will hit $196 billion by year-end.
The stalling of industrial construction through 2021 shows corporate leaders seeking inexpensive labor.
However, the pandemic’s supply-chain and logistics disaster, the US-China tense relationship, and US corporations’ alarming dependence on Chinese suppliers have prompted a major corporate reassessment.
No, the US is not producing less, but… The US ranks second in global manufacturing output behind China and outperforms Germany, Japan, and India combined.
As the world’s greatest economy, the US has lagged behind China in manufacturing and many sectors have grown severely dependent on China. The 2020-2021 shortages and supply-chain instability were a wake-up call.
US manufacturing’s GDP share went declined for years. Data from the Bureau of Economic Analysis only covers 2006. Over 13% of GDP was manufacturing then. Manufacturing fell to 10.5% of GDP by early 2020. Since then, the share has fluctuated.
This year’s construction investment boom will boost manufacturing’s GDP share when plants are operational and operating at scale, which takes time. This procedure is slow and far from complete:
Manufacturing’s secondary and tertiary consequences affect the economy for decades. Construction is a one-time expense to create and install infrastructure. Later production and its secondary and tertiary consequences on the local economy are increasingly important.
Companies invest in US facilities to create high-tech products like semiconductors and cars. According to Treasury Department data, computer, electronic, and electrical equipment manufacturers drive factory construction.
Industrial robots undermine China’s cost advantage. Automation and industrial robots, essential to mass manufacturing, cost about the same in China as the US. US labor costs are far higher, but moving manufacturing onshore reduces transportation expenses, lead times, geopolitical uncertainties, IP loss, technology transfer, etc.
Since construction cost inflation ended this year, it is not the driver. Nonresidential building construction PPI peaked in January. Since then, prices fell 1.4%. Unlike in 2022, building cost inflation did not affect the 2023 construction spending rise. This makes 2023’s manufacturing construction surge even more impressive.
Dallas Leads the U.S. Hotel Construction Pipeline Once Again
Original Source: Dallas Once Again Leads U.S. Hotel Construction Pipeline
The latest US Construction Pipeline Trend Report by Lodging Econometrics (LE) lists the top five markets with the largest hotel construction pipelines by projects at the end of the third quarter.
Dallas leads with an all-time high of 189 projects/21,840 rooms, followed by Atlanta with 140/17,775 rooms and Nashville with 122/16,046 rooms. Phoenix and the Inland Empire of Southern California follow with 119 projects/16,455 and 117 projects/11,784 rooms, respectively.
The first three quarters of 2023 saw 345 new hotels with 41,115 rooms open in the U.S., with 182 more expected by year’s end.
The markets with the most third-quarter openings include New York City (14 hotels/2,407 rooms), Atlanta (11 hotels/1,108 rooms), Detroit (10 hotels/1,292), Houston (eight hotels/1,154 rooms), and Austin.
Over the past year, the U.S. building pipeline has grown by 7% to 5,704 projects/672,676 rooms.
Additionally:
At the end of the third quarter, 1,063 projects/140,331 rooms were under development, up 8% and 4% YOY.
2,234 projects/257,729 rooms will begin construction in the next year, up 8% for projects and 9% for rooms YOY.
Each of 2,407 projects/274,616 rooms in early planning is up 7%. YOY
The third quarter had 2,149 upper midscale projects/209,895 rooms in the U.S. building pipeline, the most of any chain size. Upscale chains have 1,376 projects/170,943 rooms. These two chain tiers make up 62% of U.S. hotel construction projects. Extended stay projects comprised 38% of the pipeline.
Army engineers Take Over Final Pyeongtaek Building Project in 16-year U.S. Relocation
Original Source: Korean military turns over final Pyeongtaek construction project to Army engineers in the U.S. military’s 16-year relocation effort
The last major construction project in Pyeongtaek for the movement of American forces from Seoul to south of the Han River was completed with two pen strokes. On Nov. 30, 2023, at Osan Air Base, the ROK Design and Construction Agent (DCA) handed over the program’s last facility, a new chapel, to the U.S.
“We dedicate this space as a haven for reflection, worship, and solace, underscoring our commitment to spiritual well-being and providing both physical and emotional support to our Alliance’s personnel,” said Lt. Col. Michael Pope, U.S. DCA and FED deputy commander.
The signing highlighted both countries’ commitment to servicemembers. FED, the 51st Fighter Wing, USFK T&R, Ministry of National Defense USFK Relocation Office (MURO), and others attended.
“Together, we are amazing – and the proof is here, in this chapel, and in the bonds of work, partnership, and friendship that exist between us in this room, forged on this project and many others,” said FED commander Col. Heather Levy.
approximately 16 years, the $10.4 billion Yongsan Relocation Program built approximately 600 facilities to expand U.S. Army Garrison Humphreys from 1,210 acres to 3,528 acres. The program-built chapel will serve Airmen and their families at Pyeongtaek’s Osan Air Base.
Col. William McKibban, 51st FW commander, said this structure is crucial. He further noted that the facility symbolizes our relationship and our dedication to improving Osan.
Lt. Col. James Galyon, Chapel Chaplain, 51st Fighter Wing, stressed that the occasion was not the end of the collaboration but the beginning of a new approach to share the space for joint services and bilateral engagements.
Construction of the church began in 2020. The facility contract was executed by the ROK Ministry of National Defense – Defense Installations Agency (MND-DIA), opposite FED. USACE then supervised the project to verify it met U.S. life, health, and safety standards and gave chaplains using the facility what they needed to relocate.
At 24,000 square feet, the new structure includes a 300-person multi-faith worship center, reception hall, classrooms, and administrative areas.
“I am extremely proud of the work that my team has performed in ensuring the quality, safety, and requirements of this facility from planning through design and now, at the completion of construction,” Levy said.
After transferring the facility to FED, the unit will outfit the air base so Airmen and their families can use it in 2024.
Summary of taday’s construction news
In summary, the surge in construction spending this year will increase the manufacturing sector’s GDP share once the plants are operational and able to produce large quantities of goods, which will take some time. Put otherwise, there is still a long way to go and this is a slow process:
On the other hand, at 2,149 projects/209,895 rooms at the end of the third quarter, upper midscale projects have the greatest count of all chain scales in the U.S. construction pipeline. Thirty-eight percent of the pipeline’s projects were extended stay projects.
Lastly, the chapel’s construction got underway in 2020. The facility’s contract executor was the ROK Ministry of National Defense – Defense Installations Agency (MND-DIA), which is the equivalent of FED. After that, USACE oversaw the project to make sure it complied with all life, health, and safety regulations in the United States and that chaplains utilizing the space had all they needed for a smooth relocation.
