A senior researcher at ANBOUND has recently conducted an in-depth field study of American society, and the results were rather surprising.
The field work revealed a series of unexpected changes taking place in the U.S. Midwest. The departure halls at Detroit Metropolitan Airport were extremely crowded, and people were practically rubbing shoulders with each other. This well-known Rust Belt city, once declared bankrupt and in decline, is now seeing intense human traffic and activity, marking a significant transformation from the past. Turning to America's "Mother River", the Mississippi River, known for its rich limestone deposits, one can see many cement plants at its banks. For years, these plants were nearly abandoned. Now, they are no longer dormant. Their yards are filled with tanker trucks loaded with fuel, and the cement they produce is being continuously poured into rail tankers. The trains used to transport this cement can stretch for miles.
The transportation on the Mississippi River has undergone a full revival, and the logistics on the river are now extremely busy. This is quite an unusual phenomenon in the United States, as the country has never heavily relied on waterborne transportation. Historically, the U.S. used canals and rivers to transport minerals, grain, and goods, but that was largely in the 19th century. With the construction of the interstate highway system promoted by President Dwight Eisenhower, water transportation gradually fell into decline. On the wide Mississippi River, it was once rare to see more than one or two ships passing by. Now, however, the situation has changed drastically. On both sides of the river, numerous ships are waiting in well-organized queues for passage through locks. Tugboats shuttle back and forth, constantly rearranging ships on the river, as the entire water transport system on the Mississippi seems to have suddenly come back to life.
St. Louis, located at the confluence of the Mississippi and Missouri Rivers, is notorious in the U.S. as the "Murder Capital". Due to deindustrialization, the city once had a large population of unemployed people. Many of the former industrial areas had turned into vast stretches of abandoned ruins. Aside from the occasional sound of a passing police siren, the streets were almost deserted. Today, St. Louis is undergoing large-scale urban renewal. While there are still homeless individuals and beggars on the streets, their numbers have significantly decreased compared to the past. The city has seen a notable rise in investments, with new casinos, restaurants, and hotels opening at an impressive rate. What is particularly surprising is the evident growth in logistics centers as part of the urban renewal process. Former industrial zones, once vast wastelands, are now being transformed into massive parking lots for heavy trucks and large warehouse areas. Situated at the geographical heart of the U.S., St. Louis is strategically leveraging its location, and this urban renewal has clearly revitalized the city's economy.
The economic vitality of the American Midwest is not just showcased by the big cities. About 200 kilometers from St. Louis lies the small town of Hannibal, located on the banks of the Mississippi River. This town is famous as the birthplace of the renowned American writer Mark Twain. Historically, Hannibal was an important town, but with deindustrialization, it suffered from severe population decline and became a city in decay. The once magnificent, intricately designed historical buildings had fallen into ruin, with many abandoned and collapsing. However, Hannibal is now experiencing a wave of investment, particularly in the form of bed-and-breakfast establishments. The long-neglected, crumbling historical buildings are being restored, and more and more yachts are appearing on the Mississippi River once again. Hotels are filled with tourists, mostly from surrounding states like Texas, South Dakota, Ohio, Illinois, Kansas, and Oregon, with license plates visible everywhere. Judging by the cars, such as Mercedes-Benz and BMW, there are not many luxury vehicles. This suggests that the majority of visitors to the town for vacation or travel are likely from the middle class.
Even more intriguing is the case of Cairo, a town that had become almost entirely a ruin. Historically, Cairo was a major hub along the Mississippi River with a population of 15,000. But for various reasons, it was eventually abandoned, and at one point, fewer than 100 residents remained in the entire town. Yet, Cairo is now showing signs of revival. Roads have been newly repaved with fresh asphalt, banks have been repainted and reopened for business, and public infrastructure and utilities are once again visible throughout the town. Once a place that most people deliberately avoided, Cairo, though still bearing visible scars of decay, now shows signs of life. On the main street and surrounding side roads, there is once again a noticeable flow of people.
What is the reason behind these major changes?
Most people, including economists, believe that it is a result of the post-COVID-19 recovery and rebound. Even randomly interviewed locals share this view. However, the problem is that the decline of Mississippi River waterway transportation, the existence of urban ruins, and dilapidated historical buildings have persisted for more than a decade, some even for several decades, during which the U.S. economy has experienced multiple ups and downs. Therefore, it is essentially unrelated to the recent pandemic recovery. The increase in travel by large numbers of middle-class families is more likely linked to the growth in job opportunities and income levels in the U.S. in recent years. The large-scale construction of logistics hubs, and the intensity of this momentum can only be associated with the expansion of the domestic market and consumer demand.
When looking at news reports and economic data, the findings from field work by ANBOUND present a noticeably different picture. U.S. economic growth is still widely considered "weak", with inflation expectations remaining high, a view held even by the data-savvy Federal Reserve and Wall Street analysts. However, fieldwork reveals that the U.S. Midwest, often regarded as the least dynamic part of the economy, is showing strong economic growth. What, then, is driving development in these regions? The senior researcher at ANBOUND believes that urban renewal, cultural revitalization, and technological innovation in the American economic environment are effectively propelling economic growth, job creation, and income increases in the Midwest.
Urban renewal is the most visibly observable change. From the renovation of old industrial city districts and the upgrading of warehousing hubs to the cultural and tourism development of the hometowns of notable figures, many parts of the American Midwest are undergoing a new round of large-scale urban spatial restructuring. The U.S. has historically not placed enough emphasis on infrastructure investment, but the Infrastructure Investment and Jobs Act (IIJA) passed in 2021 has, to some extent, changed that situation. This legislation provides over USD 1.2 trillion in federal funding, enabling the Midwest to gain substantial resources for the upgrading of roads, bridges, energy systems, and urban green spaces. Of course, this wave of construction has not only led to an increase in jobs for construction workers and service industries, but is also drawing in new industries. As a result, a new urban lifestyle model is beginning to replace the long-standing image of "industrial ruins".
Cultural revitalization refers to the sense of pride that the 2024 presidential election brought to the Midwest. Although Donald Trump's presidency may not have achieved significant new milestones in terms of economic growth, it did resonate strongly with the conservative cultural atmosphere of Midwestern society. For many there, it created a palpable sense that society was indeed changing and that a new era had begun. The true losers of this election were the establishment elites and intellectual pundits of Washington. They have long viewed the Midwest often with a hint of disdain. It is as if in their eyes, the only places of value in America are New York and California, while states like Ohio, Missouri, and Kentucky are seen as neglected, irrelevant, and culturally backward, i.e., economic wilderness for the "rednecks". Now, the situation has been turned on its head. The rise of Trumpism was inevitable, or at least, from the perspective of cultural revitalization, it appears to be a lasting phenomenon. For many people in the Midwest, this is a victory, a source of pride.
Technological innovation is closely tied to the ongoing technological transformation. In the past, the U.S. high-tech industry was primarily centered around the software sector. However, with recent advances in artificial intelligence, there has been a major shift toward large-scale investment and construction focused on hardware. This includes the development of semiconductor manufacturing hubs, the building of data centers, and the establishment of large-scale AI model training facilities, among others.
In terms of policies, the U.S. has introduced the CHIPS and Science Act to encourage the reshoring of high-tech manufacturing. Naturally, the Midwest, with its relatively low costs and abundant resources, has benefited from this shift. Intel, for instance, plans to invest over USD 28 billion in Ohio to build two new state-of-the-art chip factories as part of its effort to expand its foundry business. The first facility is expected to be completed by 2030. Microsoft, attracted by Wisconsin's water resources and favorable climate, has decided to invest heavily in building an advanced AI data center campus in the state. In addition to Intel and Microsoft, companies like Tesla and Amazon are also planning, or have already begun, large-scale investments and construction projects across the Midwest. In fact, it's not just the tech sector seizing investment opportunities in the region, traditional industries are doing the same. Japan's Nippon Steel, for example, has already completed its acquisition of U.S. Steel.
Therefore, ANBOUND believes that although this recovery picture revealed through fieldwork research stands in stark contrast, and even considerable contradiction, to the economic data and assessments presented by the U.S. financial sector and mainstream institutions, this discrepancy reflects a broader misjudgment. In ANBOUND's opinion, many observers, including those in Europe, China, and even within the U.S. itself, have consistently underestimated the true growth potential of the American economy.
The senior researcher at ANBOUND pointed out that the U.S. economic growth forecast for 2025 should be revised upward, based on structural momentum driven by the three factors mentioned above, referred to as the "three renewals", i.e., urban renewal, cultural revitalization, and technological innovation. It is projected that real GDP growth in 2025 could reasonably reach around 3.5%. This projection is supported by two core arguments. First, according to data from the U.S. Bureau of Economic Analysis (BEA), real GDP growth for the full year of 2024 was 2.8%, matching the growth rate in the second quarter. ANBOUND believes the second quarter of 2025 will likewise be representative of the annual trend and may exceed expectations, potentially reaching 3.5%, which would justify a full-year growth forecast at that level. Second, field observations reveal that many parts of the U.S. Midwest are experiencing a significant surge in economic activity marked by a construction boom, crowded airports, dense logistics networks, revitalized small-town economies, and growing regional confidence driven by cultural and political shifts. Major tech investments from companies like Intel and Microsoft further support this momentum. Because these changes are not yet fully captured by conventional economic models due to data lag, ANBOUND concludes that the "three renewals" are releasing additional growth energy in the Midwest, making a 3.5% real GDP growth rate in 2025 a realistic and grounded projection.
Projecting that the U.S. real GDP growth rate in 2025 could reach around 3.5% clearly challenges the forecasts of mainstream institutions and significantly exceeds their expectations. In fact, the Fed's own projection for 2025 economic growth is just 1.4%. The Peterson Institute for International Economics predicts that the U.S. economy may stagnate in 2025, estimating a 40% chance of recession. Some institutions even forecast negative growth for the year. If ANBOUND's projection proves accurate, it would suggest that many economists are currently making a serious systemic error in their pessimistic assessments of the U.S. economy. Furthermore, ANBOUND believes that the policy implications of the "three renewals" can offer valuable insights and meaningful reference points for countries like China's future economic development and urban revitalization efforts.
Final analysis conclusion:
Field observations show that urban renewal, cultural revitalization, and technological innovation have effectively driven economic growth and job creation in the U.S. Midwest. Based on this foundation, the resulting economic growth forecast for the U.S. significantly exceeds the current expectations of most economists. The structural factors brought about by the "three renewals" suggest that U.S. economic growth this year could reach around 3.5%.
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Zhijiang Zhao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
