December 2024 capped off a year of continued growth and investment in American manufacturing. As the U.S. economy shows signs of slowing amidst global uncertainty, the manufacturing sector remains a bright spot, buoyed by both public and private sector commitments to expanding domestic production capacity. 

This past month saw several major corporations across industries announce new factories, production facilities, and other manufacturing operations across the country. From Eli Lilly’s $3 billion investment in a Wisconsin pharmaceutical plant to Boeing’s $1 billion expansion in South Carolina, companies are betting big on U.S. manufacturing.

The new factories and expanded capacity bode well for 2025, as manufacturers look to ramp up hiring and output to meet demand. However, changing political landscapes, inflation, and other economic crosscurrents have tempered optimism about growth next year. As we recap December and look ahead to 2025, a complex picture emerges—one of resilience and risk, of new opportunities coupled with lingering challenges.

A Month in Data

The latest economic data presented a mixed picture of the state of manufacturing as 2024 ended. The Institute for Supply Management’s Purchasing Managers Index registered 49.3 in December, indicating contraction in the sector for the ninth consecutive month. However, the contraction slowed compared to November, with new orders returning to modest growth. Additionally, the S&P Global US Manufacturing PMI posted 49.4 in December, down slightly from 49.7 in November. This signaled a sixth straight month of deterioration in operating conditions, as output and new orders fell at a quickened pace.

Digging deeper into the numbers reveals ongoing challenges for manufacturers but also some silver linings. New export orders stabilized in December per ISM data after months of declines, likely helped by a weaker dollar boosting the competitiveness of U.S. goods overseas. Additionally, supplier delivery times lengthened for the first time in over a year according to S&P, suggesting supply chain stresses may be slowly easing. On the labor front, manufacturing employment continued to rise according to the S&P but contracted according to the ISM in December. 

On balance, the data indicates the manufacturing sector ended 2024 on a soft footing but perhaps not as weak as anticipated given mounting economic headwinds through the second half of the year. Manufacturers appear to be rightsizing operations to dampened demand rather than making drastic cuts. At the same time, new factories and investments announced in December seem to take a longer view—betting that with the right structural support from policymakers, U.S. manufacturing can regain solid momentum in 2025. Time will tell whether that optimism is well-founded as global growth projections remain lackluster.

New Factory and Manufacturing Announcements

Of the numerous manufacturing expansion projects announced in December, a few standouts promise to significantly grow production capacity and jobs:

Lilly’s $3 billion investment to extend its Kenosha, Wisconsin pharmaceutical facilities aims to establish one of the nation’s largest sterile injectable manufacturing hubs. The 750 highly-skilled jobs created will further cement Wisconsin’s footing in biotech.

Aerospace giant Boeing’s $1 billion South Carolina expansion will bring 500 new aviation manufacturing jobs while upgrading infrastructure to increase 787 Dreamliner output. This underscores Boeing’s vote of confidence in meeting resurging travel demand.

Amgen made a splash in North Carolina with the announcement of a $1 billion next-generation pharmaceutical manufacturing facility in Holly Springs. The project will generate 370 direct jobs and enhance the state’s bioscience capabilities.

The NOVONIX Chattanooga plant supported by the Department of Energy’s $755 million loan will domestically produce synthetic graphite for EV batteries. At 31,500 metric tons annually, it could cover over 300,000 EVs, localizing this supply chain.

Pacific Manufacturing’s latest expansion in southwest Ohio will create nearly 100 jobs. Combined with existing facilities, Pacific’s regional footprint now spans over 1 million square feet and approaches 1,000 total employees.

These latest manufacturing investments signal enduring confidence in U.S. production competitiveness across highly innovative sectors. The numbers of high-value jobs created also give local economies a boost.

Future Outlook

The slate of new factories and expanded manufacturing facilities announced in December points to a brighter future for American manufacturing competitiveness. However, the sector still faces economic hurdles in 2025. Lingering supply chain constraints, higher borrowing costs, and global recession risks could dampen output and investment through the first half of next year.

Nonetheless, several structural factors underpin a more optimistic long-term trajectory. The U.S. continues undertaking historic investments to shore up domestic production of semiconductors, batteries, pharmaceuticals, and other critical industries. The Inflation Reduction Act’s incentives for clean energy manufacturing and R&D commercialization also take time to manifest. Additionally, nearshoring trends still have room to run as more companies look to diversify suppliers and shelter against global shocks.

Surging natural gas production and relatively affordable energy costs provide American factories with a persistent edge. Manufacturing employment should also rise thanks to new facilities coming online and a deep pool of skilled labor. Most economists believe a full-blown industrial recession will be avoided although growth may disappoint next year depending on consumer resilience.

In all, U.S. manufacturing seems poised to expand its footprint and influence over the next decade. However, the sector will still have to navigate a bumpy near-term outlook shaped by monetary tightening, fragile emerging markets, and domestic political transitions. The early 2025 data will provide clearer signals on how durable and broad-based recent manufacturing momentum proves to be.

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