Real business investment in manufacturing structures in the United States has risen sharply since the end of 2022. The amount of investment in this category in the first quarter of 2024 was about 80 percent higher than the amount at the end of 2022. “Industrial policy” legislation enacted in recent years likely helped fuel this sharp increase. For example, the Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, both enacted in 2022, provided large subsidies for the renewable energy and semiconductor industries.
Although investment in…
