Dive Brief:
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Increasing sales of cars, houses, oil and natural gas mean more factories are being built to manufacture components for those industries. The result: a mini-boom in factory construction.
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A 12% increase in building and renovation of factories in the second quarter of this year is a turnaround after 16 years of steady declines in plant construction—largely because so much U.S. production relocated to countries where labor is cheaper.
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Factory output rose 3.2% since January and 2.6% in all of 2013, according to the Census Bureau. Dan Meckstroth, chief economist of the Manufacturers Alliance for Productivity and Innovation, predicts continued, modest growth for at least two years.
Dive Insight:
The surge in factory construction contributed to last week’s announcement by the U.S. Commerce Department that the economy expanded at a 4.6% annual rate. That number was better than the agency’s prior estimate of 4.2%.