Podcast Summary: Thoughts on the Market – "Will U.S. Manufacturing See a 2026 Boom?"
Date: January 13, 2026
Host: Michelle Weaver (Morgan Stanley U.S. Thematic & Equity Strategist)
Guest: Chris Snyder (Morgan Stanley U.S. Multi-Industry Analyst)
Overview
This episode examines whether 2026 could mark a pivotal transformation in U.S. manufacturing. Against the backdrop of global supply chain shifts, technology-driven investments, and evolving trade policy — especially tariffs — Michelle Weaver and Chris Snyder explore the drivers of renewed capital expenditure, the growth of “greenfield” (new) projects, and the durability of the reshoring trend as a pillar of North American economic debates in 2026.
Key Discussion Points & Insights
1. Current Drivers of U.S. Manufacturing Investments
- Tariffs as a Catalyst:
- Chris Snyder attributes the recent surge in domestic manufacturing efficiency and productivity investments primarily to tariffs. Companies serving the vast U.S. market (which represents 30% of global consumption) are rethinking their supply chains.
- “The quickest, cheapest, fastest way to bring production online in the US is drive better productivity and efficiency out of the assets you already have.” (Chris Snyder, 01:29)
- Companies are optimizing existing U.S. facilities before committing to large-scale new construction.
2. Is Efficiency Spending a Prelude to Greenfield Projects?
- Changing Calculus on Production Location:
- Efficiency investments signal companies’ re-evaluation of costs, with the rising expense of imports (due to tariffs) tilting the balance in favor of U.S.-based manufacturing.
- “What all of these companies are doing are saying, okay, how can I get products into the US at the cheapest cost possible? ...when they need a new factory it's going to come to the United States.” (Chris Snyder, 02:24)
- Producer Price Index (PPI) Insights:
- North America (U.S., Canada, Mexico) saw PPI rise in 2025—indicative of higher prices and potential profitability—while other regions experienced PPI declines, suggesting overcapacity and dwindling returns abroad.
- "Price drives returns and supply is going to follow returns. And right now that price data tells us the returns are in the United States." (Chris Snyder, 03:48)
3. Key Metrics and Catalysts for 2026
- Manufacturing Project Starts:
- The number of U.S. manufacturing project announcements is increasing, albeit with more broad-based (and smaller) projects versus recent years’ megaprojects.
- Snyder considers the breadth of new projects a sign of durability: “It shows that there's durability behind it...the economics are saying it makes sense.” (Chris Snyder, 04:56)
4. Market Skepticism: What About Weak Demand?
- Addressing ISM PMI Concerns:
- Skeptics point to a shrinking ISM Manufacturing PMI as evidence of insufficient demand for new capacity.
- Snyder’s counter: This is “not a normal cycle”. The current driver isn’t organic demand growth, but tariff mitigation and import substitution—an unprecedented backdrop for capex.
- “The US has a $1.2 trillion trade deficit, so that more than anything, gets me confident in the theme and the duration behind it.” (Chris Snyder, 05:53)
5. Broader Economic Impact
- Capex and Growth Outlook:
- Morgan Stanley projects that the U.S. industrial economy will reach decade-high growth rates in the latter half of 2026 and into 2027, fueled by these investments.
- The gap between U.S. consumer spending and U.S. manufacturing production has narrowed, implying more domestic production is serving local demand—further sustaining the trend.
- “We're increasingly serving US demand through domestic production...it doesn't need a cycle...creates this as a more secular and durable opportunity.” (Chris Snyder, 07:13)
6. The Multipolar World & Strategic Shifts
- 2026 as a Year of Strategic Reshoring:
- Weaver notes a shift from short-term tariff risk management to long-term strategic actions, including greenfield projects, as core to the “multipolar world” thesis.
- Expect heightened emphasis on U.S. defense industrial capacity, echoing trends previously seen in Europe after geopolitical shocks.
- “This year it’s going to turn to more longer term strategic thinking...reshoring and a lot of the greenfield projects...will absolutely be an important component.” (Michelle Weaver, 08:16)
7. Long-Term Perspective
- Potential Lasting Shift:
- While U.S. manufacturing may not reclaim all lost global share from the past quarter-century, the runway for growth is long.
- “It’s taken 25 years for the US to cede roughly 12 percentage points of global share in manufacturing. We don’t think they take that much back, but we think this is a very long runway opportunity.” (Chris Snyder, 09:09)
Memorable Quotes & Moments
-
On the New Cycle’s Uniqueness:
“This is not a normal cycle. … The motivation right now is tariff mitigation, and you do not need higher demand to support that.”
(Chris Snyder, 05:41) -
On Price Signaling Factory Location:
“Price drives returns and supply is going to follow returns. And right now that price data tells us the returns are in the United States.”
(Chris Snyder, 03:48) -
On Greenfield Projects as a Foundation:
“Efficiency and productivity investments are more than just a stopgap. They're a longer term theme and they're a foundation for a new era in U.S. manufacturing.”
(Michelle Weaver, 09:29)
Timestamps for Key Segments
- 00:09 – Introduction: Setting up the U.S. manufacturing transformation theme
- 01:16 – Drivers of productivity and efficiency investment in U.S. manufacturing
- 02:14 – Efficiency investments as precursors to greenfield projects
- 03:10 – Regional PPI differences and implications for factory placement
- 04:40 – Metrics and catalysts: Manufacturing project starts
- 05:25 – Addressing skepticism: Weak demand and ISM PMI concerns
- 06:49 – Capex cycle and U.S. domestic production trends
- 07:55 – Multipolar world: Evolving strategies and greenfield focus
- 09:06 – Long-term runway for U.S. manufacturing growth
- 09:24 – Summary: Efficiency as foundation for a “new era”
Tone and Style
The episode maintains an analytical yet forward-looking tone, reflecting the weight of data and macro themes coupled with a sense of optimism about the sustainability of the reshoring trend.
This summary provides a comprehensive glimpse into the episode, making it accessible to listeners and non-listeners alike who are keen to understand the future of U.S. manufacturing and its investment implications in 2026.