The Disruption Report #76: America Just Set a Record for Building New Factories, A West Coast Port Strike Is Getting More Likely, and a Strike Could Cost the Economy $500 Million a Day

America Is Building Factories, Lot’s of Them

The United States set a record for factory construction in 2022. Here is how Wall Street Journal writer John Keilman puts it in his article, “American Is Back in the Factory Business.”

Construction spending related to manufacturing reached $108 billion in 2022, Census Bureau data show, the highest annual total on record—more than was spent to build schools, healthcare centers or office buildings.

American Is Back in the Factory Business,” John Keilman, The Wall Street Journal,

What kinds of companies are building factories? As you would imagine, a lot of it is high-tech. Concerns about securing the supply chain and lots of government money are motivating semiconductor and electric car battery companies to bring production home. But it’s not just high-tech products.

Companies that once relied exclusively on lower-cost countries to manufacture eyeglasses and bicycles and bodybuilding supplements have found reasons to come home.

American Is Back in the Factory Business,” John Keilman, The Wall Street Journal,

The only fly in the ointment is that there are not enough workers. In fact, we are about 800,000 short.

No Agreement with West Coast Ports Yet, AND ITS STARTING TO GET UGLY

That labor agreement between the ports and the Longshoreman’s Union that looked so close a few months ago is going sideways. The PMA (The Pacific Maritime Association) representing all of the west coast ports in the negotiation has accused the International Longshoreman and Warehouse Union of disrupting terminal operations. It appears that the union is unhappy with the pace of negotiations that have been going on since May of 2022, almost a year ago.
The lack of a contract comes at a tough time for the west coast ports, particularly Long Beach and Los Angeles. Due to supply chain disruptions during the pandemic, they have been losing business to Gulf and East Coast ports. In addition, they are facing reduced container traffic because U.S. imports from China are down heavily.

It’s a mess that needs to be cleaned up before the union calls a strike, something that no one needs.


What would be the impact of a strike? In his Bloomberg article, “A West Coast Port Strike Would Cost US Economy $500 Million a Day,” Brendan Murray describes the situation as a “slow-motion train wreck.”

Here is how he describes potential damage from a strike:

The National Association of Manufacturers released a report last year estimating the potential fallout at $500 million a day, with a hypothetical 15-day strike leading to 41,000 job losses.

“A West Coast Port Strike Would Cost US Economy $500 Million a Day”, Brendan Murray, Bloomberg supply lines

From what I am reading, it appears that President Biden would quickly step in if there is a strike. Let’s hope so.

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