Manufacturing facility construction is experiencing record-breaking growth, but the risks associated with location decisions are more substantial than ever. Companies that rushed to expand over the past two years are now confronting real challenges: securing labor, navigating unpredictable utility timelines, and responding to policy swings that can alter cost models overnight.

The current environment is not just active — it’s volatile. Manufacturers that want to avoid delays and missteps must treat site selection as a form of risk management, not just opportunity hunting.

The federal government has played a major role in sparking new investment. The CHIPS Act, Inflation Reduction Act, and Infrastructure Investment and Jobs Act have collectively poured more than $1 trillion into sectors like electronics, batteries, renewables, and semiconductors. That money has helped drive a 155 percent increase in manufacturing construction spending from 2022 to 2024, outpacing all other nonresidential sectors. Advanced manufacturing now accounts for more than half of all manufacturing spending, with the “computer/electronic/electrical” category leading the charge.

But access to funding doesn’t guarantee results. Some companies are already learning the hard way that cost and timeline assumptions can fall apart without a deeper look at the local labor market, utility capacity, and supply chain alignment. Delays in power delivery alone have eliminated sites that once seemed like front-runners.

At the same time, geopolitical forces are adding complexity. Trade tensions and the resurgence of protectionist policies have pushed more foreign manufacturers to explore U.S. locations, but these decisions must be made with a long-term mindset. Site selection based on current administration policy or short-term incentives is a risky move for any project with a 20-year horizon and hundreds of millions of dollars at stake.

Manufacturers should start by identifying regions — not sites — that support the core requirements of their business. That includes access to the right workforce, proximity to customers and suppliers, and utility infrastructure that can be expanded within project timelines. Without alignment on those foundational elements, visiting specific sites is premature.

The best site selectors don’t initiate the process by chasing “opportunistic” locations. They begin with models built on key operating and financial criteria. What does labor cost at different percentiles? How have wages trended over time? Are there historical concentrations of the specific skills required — not just general manufacturing labor? How does power access and cost vary by location? Can water and wastewater infrastructure be extended without triggering delays or permitting issues?

These are the questions that narrow 100 potential regions down to 10 and ultimately focus decision-making on two to three viable sites for detailed due diligence. A good site is not just a plot of land — it’s a bundle of certainties: certainty that the workforce can scale without cannibalizing the local labor pool; certainty that grid capacity can support operations today and grow tomorrow; certainty that supply chain costs and logistics align with both short-term and long-term goals.

Manufacturers that treat site selection as a check-the-box activity are often the ones that end up backtracking. Those that view it as a critical extension of their business model are the ones that hit their timelines, their numbers — and position themselves for long-term success.