Summarize this content to 2000 words in 6 paragraphs in Arabic The US bid to lead the world in artificial intelligence and advanced manufacturing is facing a critical hurdle: a shortage of development-ready industrial sites.Nearly two-thirds of the people involved in securing US industrial sites cited their scarcity as the top factor impeding new projects, in a 2024 survey by the Site Selector’s Guild. And 87 per cent of respondents said resource shortages — including a lack of land, labour and utilities — had affected or compromised project timelines. “It’s absolutely crazy,” says Josh Bays, a principal at Site Selection Group, which helps companies find US locations. “Most of the low-hanging fruit’s been picked over.” President Joe Biden’s landmark industrial policies — the Inflation Reduction Act and the Chips and Science Act — have sparked a manufacturing boom, with nearly $400bn in large-scale investment announcements since they came into force in August 2022.Simultaneously, the rise of AI has spurred a surge in data centre construction, with project announcements tripling in the first half of 2024, according to data provider Wood Mackenzie. Together, these two drivers have sparked fierce competition for suitable land — threatening to derail the White House’s efforts to onshore manufacturing and shift supply chains away from China.“The good ready-to-go sites are few and far between . . . Nobody wants to wait five, six years to establish a new facility,” says Ulrich Schmidt, principal of KPMG’s site selection and project development practice. The constraint is not simply space, but finding land with easy access to the power grid. The growth of manufacturing and data centres is driving a huge rise in demand for electricity across an ageing grid, with new power station projects facing years-long wait times.US power demand is expected to rise 9 per cent by 2028 and nearly a fifth by 2033, after two decades of almost flat line growth, according to consultancy ICF. Another estimate by consultants Bain found that electricity generation would need to rise by up to 26 per cent by 2028 to meet projected demand.“It’s just not as simple as it used to be,” says Kenny McDonald, chief executive of One Columbus, the economic development organisation in charge of Ohio’s capital. The city’s sprawling suburbs have now become a prime spot for the country’s onshoring and AI efforts, housing Intel’s two $28bn chip factories, a $600mn solar factory, and numerous data centre projects, including a $1bn commitment from Microsoft and a $3.5bn commitment from Amazon. Data centres are hugely energy intensive, with a large site drawing four times as much power as Intel’s two factories, McDonald reckons. American Electric Power, the regional utility, estimates that electricity demand in central Ohio will more than double by 2030.“Power is the name of the game right now,” says Brandy Lynch, head of economic development in Person County, a rural area of North Carolina. The county recently sold its 1,350 acre industrial park to Microsoft for $27mn, after it had been considered by other manufacturers and previously marketed for chip making. The site was attractive for its high-voltage power lines and proximity to two coal power plants that are in the process of being converted to gas, says Lynch. The tech group has yet to say what its plans are for the site.This high demand for sites from data centre developers and advanced manufacturers has prompted a debate among state and local officials about which industry is more beneficial for economic development. While factories tend to create more jobs, they often generate less property tax revenue and need to be located near big population centres for hiring.“At the end of the day, jobs tends to be the more important metric or currency that state economic development groups focus on,” says Christopher Chung, chief executive of North Carolina’s economic development arm. The state has secured a number of large manufacturing projects in the past couple of years, including Toyota’s $14bn electric vehicle battery plant and Wolfspeed’s $5bn chip fab, cutting its inventory of large ready industrial sites in half. Last year, North Carolina’s legislature allocated $100mn to identify and prepare new large industrial sites. Several other states, including Kentucky, Michigan, Tennessee and Oklahoma, have devoted additional funding to site preparation in the past couple of years, with Pennsylvania launching a $400mn programme to enhance sites in October. Until more sites come online, developers are looking beyond traditional markets and considering lower-tier locations with more readily available space and power. Vacancy rates in secondary markets, including Austin, Minneapolis and Charlotte, fell from 12.7 per cent to 9.7 per cent over the past year, according to commercial real estate company CBRE.“It’s becoming more difficult to find these locations,” says Dennis Donovan, principal at Wadley, Donovan, Gutshaw Consulting, a site selection group. “They’re out there, but it’s not a slam dunk any more.”
