The United States is potentially about to see a resurgence of industrial production over the next decade. Anyone taking a road trip along the Eastern Seaboard would have noticed miles of factory construction sites along the North Carolina to West Virginia corridor.
Multinational corporates are responding to political uncertainty in China, where expanding production has become less workable. The US has emerged as a compelling alternative, partly due to fiscal incentives relating to the administration’s Inflation Reduction Act and Chips and Science Act. Further, the relative stability of energy prices compared to Europe, which had large exposure to Russian supplies, is more appealing to heavy industrials. The West Virginia corridor appears to offer the best combination of resource, weather exposure, educated workforce and labour cost.
Alex Veroude, chief investment officer, Insight Investment, Fixed Income
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