00:00 Speaker A
The White House is pointing to the AI data center construction as evidence Ben, evidence of a manufacturing revival in this country. What do you make of that point?
00:11 Speaker B
This is a very specific area of jobs report. You have to go from the jobs report to the construction number to the specialty trade contractor’s number to what’s called the non-residential specialty trade contractor’s number. This is a figure that has been associated with the AI boom and has grown a lot. It added about 12,600 jobs last month and it’s up, um, over about 70,000 from from about a year ago at this time. So this is a big area of growth,
00:46 Speaker B
largely powered by this AI boom. Where I think it gets tricky is sort of connecting that as the White House is doing to kind of overall factory growth, manufacturing jobs. Other areas of the jobs report today in this area weren’t so good. Manufacturing was down about 2,000 jobs. Construction outside of this very specific area was also net negative other than these these specialty trade contractors there. So it’s it’s a it’s a bit of a stretch that the White House is trying to make here to say that this fat this money going to AI data centers will lead to a manufacturing boom down the road. Partly because of probably we know how data centers work. There’s not a lot of permanent employees there once this construction phase is over.
01:30 Speaker A
If Trump was here, he might say, listen, the problem Ben is you are thinking about and defining manufacturing using just old definitions. and the manufacturing of the future, it’s not going to be, you know, traditional assembly line work. It’s going to be data centers and chip fabs and you know, building out grids. We are in an industrial boom, he might say, it’s just different than how we might traditionally define it. What would you tell the president?
02:00 Speaker B
I don’t think that would be wrong in the sense that this could be a new model for kind of how we think of manufacturing, how we think of factories in the US. I think the person that Trump has to convince here are people in these communities that are seeing a lot of job growth now and could see a lot less jobs. These are very different than the kind of factory jobs you think of even as they try to link these together. This is electrical, this is plumbing. This is not like a Laverne and Shirley opening sequence where they’re on an assembly line. This is very different and it’s a much smaller number. It’s 100 or less employees in a lot of these data centers once they’re once they’re up and running.
02:37 Speaker B
The overall point here I think could be right. this is the kind of model of how we’re doing we’re doing factory construction, we’re doing manufacturing construction going forward. It’s just that the end product here is really not what we think of in our mind as a factory. And that that’ll be an issue that’s going to play out for a lot of years depending on how these data centers go up and kind of what they look like in the end alongside the other factory construction that is still ongoing. The White House does make a case here that a lot of this is in their view a leading indicator of what we might see as traditional factories, but it’s clearly really heavily tilted towards AI at the moment. And that’s where a lot of the money and that’s where a lot of these construction jobs are.
