Part of this is due to fiscal stimulus, including the $1.2 trillion bipartisan infrastructure deal in 2021 or billions of dollars in additional investment mobilized by the CHIPS and Inflation Reduction Acts. Intel’s new semiconductor plants in Chandler, Ariz., worth a combined $30 billion, or Samsung’s $17 billion foundry in Texas are the types of projects that might come to mind.

Now, a new report from Bank of America economist Taylor Bowley suggests this investment is also spilling over to small businesses, particularly in the South and Midwest. That’s a big deal, she told me, because small businesses employ nearly half of the U.S. workforce. Understanding how billions of dollars aimed at creating American jobs affects smaller firms, she said, may be just as vital as examining the effects of, say, a rate cut from the Fed.

“We’re able to utilize our small business data and find that manufacturing and construction firms are experiencing growth,” Bowley said, “and also potentially [a] boost in employment that is tied to this booming investment from this fiscal stimulus.”

BofA Global Research has previously determined that every $10 billion of manufacturing revenue that is moved back to the U.S. generates an estimated $3.8 billion increase in capex spending overall. That’s good news not just for Fortune 500 companies but also for smaller construction firms across the U.S. Bowley’s report found the latter’s cash inflow-to-outflow ratio, used as a proxy for profits, reached historic highs in August.

“More profits means growth,” she said, “which is, of course, a positive for these regional economies.”

Reshoring and foreign direct investment have accounted for two million additional manufacturing jobs since 2010, according to the Reshoring Initiative, a 1.4% boost to the sector’s labor force. Sixty percent of those positions have gone to the South, the report notes, with the Midwest receiving a 22% chunk.

While manufacturing payroll growth has been strongest in the South, it’s fallen significantly in the Midwest. It’s a different story in construction, however, with payrolls up 13.5% year over year in the heartland, nearly doubling the growth rate in the South.

Bowley said this suggests many construction projects remain unfinished, meaning future gains could eventually carry through to the manufacturing sector. The same is likely true, she said, for the country overall. Small business manufacturing profits, though down from 2022, remained up from 2019 levels.

“As reshoring efforts kind of continue to materialize and continue to play out,” she said, “in our view, this investment should maintain a ripple effect in these regions over time.”

In other words, Main Street may just be beginning to reap the rewards.

Greg McKenna
greg.mckenna@fortune.com

Leaderboard

James “Jim” Mikolaichik was named CFO and treasurer at United Parks & Resorts Inc. (NYSE: PRKS), a theme park and entertainment company, effective Nov. 11. Mikolaichik brings over 30 years of global financial and strategic planning experience. Most recently, he served as CFO of MyEyeDr. Before that, he was EVP and CFO at Diamond Resorts.

Terry Kohler was named CFO at Optinose (Nasdaq: OPTN), a pharmaceutical company. Kohler was most recently the CFO for Verrica Pharmaceuticals, a dermatology therapeutics company. He has over 20 years of experience as a biotech finance leader.

Big Deal

“AI in the Workplace: Answering 3 Big Questions,” a new Gallup report, finds that only a third (33%) of all U.S. employees say their organization has begun integrating AI into their business practices, with the highest percentage in white-collar industries (44%).

The research also found that despite leaders prioritizing using AI tools themselves, most employees are not. Gallup's survey found that nearly seven in 10 employees say they never use AI, while one in 10 say they use it at least weekly. “These figures remained essentially unchanged from 2023 to 2024, suggesting that AI adoption requires leadership and training to increase usage,” according to the report.

Going deeper

The inaugural 2024 BDO Audit Innovation survey finds 84% of finance leaders anticipate audit quality will improve with increased integration of technology. However, 80% of respondents agree that a lack of compatibility between an audit firm’s tech and the audited organization’s financial systems is an obstacle.

Regarding top barriers to a smooth audit experience, 69% of respondents said establishing data governance and internal data management is the top obstacle. And 45% of finance leaders said their data governance is either not mature, or only somewhat mature, according to the findings.

The survey polled 200 senior finance leaders at U.S. private and publicly held companies with revenues ranging from $250 million to $3 billion.

Overheard

“Don’t take any storm for granted.”

—Atlanta mayor Andre Dickens told the audience during Fortune’s Impact Initiative conference in Atlanta on Tuesday. Hurricane Milton is expected to spare the city. But that doesn’t mean Dickens is taking any chances. He outlined what he does as mayor to prepare for increasingly strong storms.