Bidenomics delivers. Trump blows smoke.
The EPC market (Engineering, Procurement and Construction) tends to be counter-cyclical. Spending there leads to jobs and increased manufacturing later. When engineers (moi) and construction workers (later) start looking for work, others are getting jobs in factories we’d just completed designing and building. As new factories come online, our work might slow down. Know the difference. So here are two stories about that.
America’s spending on the construction of new factories is surging.
Why it matters: The Biden administration’s signature legislation — particularly the CHIPs Act and Bipartisan Infrastructure Law — has spurred a surge in construction spending that’s buoyed the economy, as Axios’ Neil Irwin reported.
By the numbers: Manufacturing-related construction hit a $210 billion annual rate in November, more than triple the average rate in the 2010s, according to Census data out this week.
- All that spending is driving an increase in construction hiring. Job openings in construction increased by 43,000 last month, according to BLS data out yesterday — and are up by 111,000 from last year.
- Contractors are even facing labor shortages in areas with industrial mega projects, Anirban Basu, the chief economist of the Associated Builders and Contractors, said in a release Wednesday.
Bidenomics naysayers will focus on tales of a manufacturing “contraction” (Bloomberg):
The Institute for Supply Management’s manufacturing gauge edged up 0.7 point to 47.4 last month, helped by a pickup in production, according to data released Wednesday. Readings below 50 indicate contraction, and the figure was near economists’ expectations.
The December result extends the longest stretch of shrinking activity since 2000-2001, when the dot-com bubble burst and sparked a recession.
High borrowing costs, waning demand, etc., etc.
However (Industry Week):
To many investors and observers, the Dec. 13 signal from the Federal Reserve’s interest-rate setting Federal Open Market Committee that it might cut three times this year was a reason to move to a more optimistic stance about continued growth in the U.S. economy.
It looks like many corporate executives were already there.
A handful of recently published surveys, reports and forecasts have shown that leaders in manufacturing and beyond are pretty upbeat about what lies ahead in 2024. The “vibecession” that writer and financial educator Kyla Scanlon coined to sum up persistent negativity in the face of improving economic data looks to be leaving C-suites.
Affirmation
The report continues with half a dozen bullet points making that case then turns to Joey Politano of Apricitas Economics (who generated the chart at the top):
“American businesses’ economic uncertainty has also dropped to the lowest levels since early 2020,” he wrote. “Firms have more confidence in their year-ahead employment and revenue forecasts than at the start of either 2021 or 2022.”
By no means do these data points suggest an attitude among business leaders that it’s green lights all the way for 2024. It appears to be more an affirmation that things are generally in solid shape and that important macro factors are, as suggested by our most recent Tales From the Transcript analysis of publicly traded manufacturers, finding a level of balance many businesses have been yearning for since 2019.
Meanwhile, at a federal courthouse near you (Washington Post):
Prosecutors have repeatedly described Donald Trump’s false claims of voter fraud in 2020 as effectively manufacturing a pretense for illegally overturning the election. Special counsel Jack Smith said in his indictment of the former president that fake electors were meant to “create a fake controversy” that could be used on Jan. 6, 2021.
In a new filing, Trump’s legal team appears bent on helping prosecutors make that case.
Everything but the spaghetti
And the Trump report is a “doozy” says the headline on Aaron Blake’s report, a real “mess”: false claims, debunked claims, irrelevant claims, and “multiple accounts of alleged fraud that don’t appear to be publicly available.” Without links or named sources, as we’ve come to expect.
Trump’s legal team throws everything against the wall except the spaghetti and their licenses to practice law.
But it’s one thing to say these things in public; it’s quite another to include them in a legal filing. Trump’s attorneys have been careful not to actually vouch for his wildest claims, because doing so involves trying to substantiate them, and legal scrutiny has been unkind — to put it mildly.
Trump’s lawyers do not say that the claims in the report are true, instead using the document in an effort to substantiate the idea that there remain “vigorous disputes” and “questions” about the results. The aim is to apparently cite the smoke without actually claiming there’s fire.
But what it demonstrates is how much this entire effort was about manufacturing smoke. And in that way, the Trump lawyers in effect just proved the prosecutors’ point.
The Biden economy is building factories for manufacturing consumer goods. Donald Trump has cornered the market in manufacturing smoke with which to cover his considerable ass.