In June 2022, amid a domestic manufacturing boom, the Lego Group announced plans for a carbon-neutral factory in Virginia. Nearly a year later, in April 2023, the company broke ground on the plant. However, construction on the new Lego factory began during a drastic decline in US manufacturing and a looming recession. With that said, does the plastic brick factory mark an upswing in domestic manufacturing, and what’s the overall economic impact?
The new Lego manufacturing plant is part of a push for environmentally friendly factories.
Firstly, the plant will operate entirely on solar panel arrays and an on-site solar plant to achieve net-zero carbon emissions. The facility is part of a nationwide push for environmentally friendly manufacturing facilities. According to the Environmental Protection Agency, sustainable manufacturing increases operational efficiency through reduced waste and energy consumption.
Additionally, in January 2023, ABC News reported the Inflation Reduction Act had incentivized $40 billion in clean energy investments. The new Lego manufacturing facility is part of the company’s goal to reduce CO2 emissions by 37% by 2032. And the plant will create over 1,700 jobs for Virginians.
Domestic factory production is at a three-year low after a post-pandemic boom.
According to Reuters, domestic manufacturing fell to the lowest point since the pandemic hit in early 2020. The Insititute for Supply Management (ISM) Purchasing Managers’ Index (PMI) survey fell to 46.3 in March.
The Federal Reserve’s rate hikes caused a decrease in demand, spurring a slump in US production. However, Reuters reports data shows moderate growth for domestic manufacturing, accounting for 11.3% of the economy.
“The future economic impact of the LEGO Group’s US manufacturing plant […] cannot be overstated,” said Democratic Senator Janet D. Howell. The Washington Post reports The commonwealth has seen an influx of manufacturing thanks to a bipartisan incentives package. Along with the LEGO Group, Boeing and Raytheon have plans to relocate their headquarters to VA.
