Southeast and Midwest Lead U.S. Manufacturing Resurgence as Investment Surges 183%

U.S. manufacturing is experiencing a dramatic resurgence, with manufacturing spend surging 183% between 2020 and 2024 according to Deloitte. This growth is concentrated in the Southeast and Midwest regions rather than traditional Rust Belt manufacturing centers, reshaping the geography of American industrial production and creating new opportunities for manufacturers, suppliers, and service providers.

Federal legislation, including the CHIPS Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act, has incentivized both onshoring and reshoring initiatives. Consumer preferences also support this shift, with buyers willing to spend up to $150 more per month for locally made goods. These factors combine to create a manufacturing environment markedly different from the offshoring trends that dominated the previous two decades.

Regional Patterns Reshape Manufacturing Geography

The Southeast Corridor, including South Carolina, Tennessee, Georgia, and Alabama, has attracted significant investment over the past five years. Business-friendly regulatory environments, lower taxes, and right-to-work regulations create competitive conditions that appeal to manufacturers evaluating expansion or relocation opportunities. Labor availability and cost structures in these states offer advantages for companies managing tight margins.

In the Midwest, reshoring initiatives and advanced manufacturing projects are driving strong returns of industrial operations. While traditional Rust Belt states see some of this resurgence, investment is also pushing further west, with manufacturing operations in Chicago and surrounding areas serving as examples of renewed urban and regional growth. Centralized warehousing and distribution models in the Midwest enable more cost-effective manufacturing and storage.

Unionization rates differ significantly between regions. The Rust Belt maintains an average unionization rate of 13.3%, while the South averages 4.3%. This difference affects labor flexibility and operational structures for manufacturers considering regional facility locations.

Understanding regional labor markets, cost structures, and regulatory environments is essential for manufacturers evaluating expansion opportunities. Our team helps manufacturers analyze regional economics, evaluate facility location decisions, and manage the financial aspects of expansion projects.

Multiple Factors Drive Regional Manufacturing Growth

Labor and workforce flexibility vary significantly by region. The Southeast offers greater workforce flexibility through right-to-work laws and lower unionization rates. Both the Midwest and Southeast now have access to technical training ecosystems through local colleges and technical schools, helping manufacturers build skilled workforces for advanced production operations.

Energy and cost structures favor different regions for different reasons. Southern states often have cheaper electricity, land, and housing costs. Midwest facilities benefit from warehouse and manufacturing combinations that reduce total cost of ownership. Infrastructure and logistics advantages exist in both regions, with major ports, rail lines, and intermodal hubs making them strategic locations for exports and supply chain operations.

Clustering effects strengthen as original equipment manufacturers relocate operations. When major manufacturers move to a region, suppliers and service providers follow. This creates local supplier ecosystems that reduce lead times and improve supply chain flexibility. For manufacturers considering regional expansion, understanding the maturity of local supplier networks affects facility location decisions and operational planning.

Technology and advanced manufacturing requirements drive investment in both regions. Electric vehicle production, aerospace component manufacturing, and medical device production require high reliability paired with minimal downtime. These sectors need advanced maintenance services, skilled technicians, and production systems that support consistent quality output.

Major Investments Signal Long-Term Regional Growth

The Southeast manufacturing corridor has seen substantial investment in motor vehicle production, both gas-powered and electric. Ford Motor Company is spending more than $11 billion to build electric vehicle battery plants in Tennessee and Kentucky as part of its Blue Oval initiative. These facilities rely on high-cycle stamping, intelligent robotics, and automated assembly lines that require consistent maintenance and uptime.

The Midwest has attracted major investments in advanced manufacturing. Ohio saw a $20 billion investment from Intel for semiconductor production, and Indiana announced a $3.87 billion investment from SK Hynix for AI microelectronics production. These investments create demand for precision manufacturing capabilities, clean room operations, and specialized workforce skills.

Border regions, including the Texas Triangle and Mountain West, now serve as supportive hubs, offering component manufacturing and supply chain logistics that complement production operations in core Southeast and Midwest manufacturing zones. This distributed approach creates regional manufacturing ecosystems rather than isolated facilities.

For manufacturers in Florida and throughout the Southeast, understanding how these regional trends affect supply chains, workforce availability, and competitive positioning helps inform strategic planning. Companies that can serve growing manufacturing clusters position themselves to capture market share as production volumes increase. Want more clarity on how regional manufacturing trends affect your growth strategy? Our team helps manufacturers analyze market opportunities and develop strategies for serving expanding industrial sectors. Contact us today to discuss how to position your operation for regional growth opportunities.

Strategic Implications for Manufacturing Operations

New facilities and factory expansions create higher demand for industrial maintenance services, reliability partnerships, technician staffing, and preventive maintenance support. Smart factories that use Industrial Internet of Things devices and AI-enabled decision-making require advanced maintenance and digital reliability practices to achieve maximum uptime.

Local supplier and maintenance ecosystems reduce travel logistics and improve service times. Regional workforces include local technicians familiar with unique regional conditions who can more effectively diagnose and resolve maintenance issues. Customized maintenance programs that address uptime, scalability, and talent-pipeline challenges are essential for sustained growth.

Manufacturers should evaluate facilities through a maintenance and reliability lens, considering access to skilled technicians, service providers, and supply chain resources. Reliability programs should align with growth regions and include scalable preventive and predictive maintenance, technician staffing, and asset health monitoring.

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Looking to strengthen your plant’s financial performance and long-term strategy? Our advisors help manufacturers manage margins, plan capital investments, and support profitable growth.

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