Trump’s factory boom isn’t what it looks like
The data, however, paint a more nuanced picture of which sectors are booming. Of the 33,000 construction job gains in January, more than 25,000 were in nonresidential specialty trades, the category that includes…
The data, however, paint a more nuanced picture of which sectors are booming. Of the 33,000 construction job gains in January, more than 25,000 were in nonresidential specialty trades, the category that includes electrical and mechanical work tied to data centers and power infrastructure. Nonresidential building construction added 3,600 jobs. While both factories and data centers rely on a mix of building and specialty contractors, economists say the recent strength in specialty trades reflects the systems-heavy nature of data centers and power infrastructure projects.
And many economists believe those jobs were just a blip in the data, driven largely by unseasonably warm weather during the period when government statisticians were collecting data.
That disconnect could complicate Republicans’ argument to working-class voters looking for signs of a Trump-fueled factory comeback. Construction crews erecting data centers may signal investment but do not necessarily translate into the robust payrolls that anchor communities and reshape local economies in the way factories do, and polling shows that Americans are unsure whether data centers will be beneficial to their communities.
“Whether it’s warehouses, data centers, manufacturing or a Buc-ee’s or whatever, what is ultimately going to bring stable, high-paying jobs into the community? From that perspective, manufacturing is the winner,” said Scott Paul, president of the Alliance for American Manufacturing. “At a data center, there are fewer jobs. There will be a few high-skilled jobs, but not a lot of them.”
“I think that’s a very fair question of, what’s going to get you more bang for the buck, employment wise?” Paul added.
What’s more, the unceasing demand for new data centers is crowding out other projects in America’s heartland — meaning it might take even longer for those manufacturing jobs to come to fruition. Electricians, HVAC technicians and other skilled workers are in short supply nationwide. Data center developers — backed by tech giants with deep access to credit markets — have been willing to pay premiums to secure crews and keep projects on schedule, industry economists say.
In regions experiencing heavy data center buildouts, that dynamic can delay or raise the cost of other industrial projects competing for the same labor pool.
“Nobody can hire an HVAC person because data centers are absorbing all the people [and] farmland,” Austan Goolsbee, a former economic adviser to President Barack Obama who’s now the president of the Federal Reserve Bank of Chicago, told reporters on Monday — describing a recent trip to Cedar Rapids, Iowa. “Massive demand of AI data centers is kind of overheating and overloading” the scarce resources that are available for other projects.
