The Inflation Reduction Act (IRA), Infrastructure Investment and Jobs Act, and the CHIPS and Science Act sparked an unprecedented boom in private manufacturing investment in the U.S. Between 2021 and mid-2024, annual private construction spending on U.S. manufacturing facilities tripled, rising from about $80 billion to nearly $240 billion. Pennsylvania stood to benefit directly from new clean energy plants, advanced manufacturing projects, and supply chain expansions.
But the trajectory has shifted. By mid-2025, annual private construction spending on manufacturing had already dipped back to a $225 billion annual rate. With Congress scaling back IRA tax credits and grants, the question is whether this is an early warning of a return toward pre-2021 levels. If so, Pennsylvania’s opportunity to capture a share of this investment wave could evaporate.
Pennsylvania’s construction and manufacturing sectors are already lagging. As of July 2025:
- Construction employment remains 1.3% below pre-pandemic levels (February 2020), while construction jobs are up 9.2% nationally.
- Manufacturing jobs in Pennsylvania are still 1.6% below pre-pandemic levels, compared to near full recovery nationwide.
Business investment depends on stable policy. Our 2025 “State of Working Pennsylvania” report warns that “cuts in clean energy and manufacturing subsidies may already have begun to hamper private investment” and that uncertainty around tariffs and subsidies further discourages firms from committing to long-term projects. When companies cannot predict whether tariff protections will stand or whether subsidies will be available, they hesitate to break ground.
The costs will not be borne evenly. U.S. and Pennsylvania workers face a labor market that is weaker than it has been in recent years. Hiring rates are lower and quit rates are down. Unemployment has risen across the board, but more sharply for Black and Hispanic workers than for white workers. Cuts to subsidies risk accelerating these negative trends by pulling away one of the few bright spots of recent economic growth: new investment in manufacturing and clean energy.
The good news is that this outcome is not inevitable. A bipartisan group of lawmakers, including representatives from districts that stand to lose billions, should call for restoring the IRA’s original deadlines for clean energy and manufacturing tax credits. Doing so would stabilize investment flows, strengthen U.S. competitiveness, and ensure that Pennsylvania communities share in the gains from the clean energy transition.
The State of Working Pennsylvania 2025 frames the economy as a “choose your own adventure” novel. One path leads to declining investment, stalled wage growth, and widening inequality. Another path restores subsidies, builds on the momentum of recent years, and secures Pennsylvania’s place in the industries of the future. For Pennsylvania workers, the choice could mean the difference between a lifeline evaporate, or a chance to rebuild a middle class anchored in clean energy and advanced manufacturing.