Data centre boom fuels US manufacturing expansion and hiring surge
A $250 million factory upgrade by Generac and capacity expansions by peers highlight how data centre growth is driving job creation and order backlogs, despite mixed sentiment across the broader manufacturing sector.
The surge in demand for US data centres is driving significant expansion across the manufacturing supply chain, benefiting companies such as Generac, Siemens, and Timken. Generac is investing $250 million by the end of next year to equip factories for data centre generators, with an order backlog of $1.6 billion and plans to hire 1,000 workers, representing a 10 per cent increase in headcount.
Siemens is investing more than $200 million in two new plants in Georgia and Texas to produce electrical equipment for data centres. Lucian Boldea, chief executive of Timken, stated that data centres are adding a new growth leg to orders from traditional customers like defence and aerospace. Southeastern Hose, a family-run company in Georgia, has tripled its revenue over the last five years due to data centre demand, adding 60 workers to reach a total of 150 employees.
Wood Mackenzie projects the electrical equipment market tied to US data centres will surge from $33 billion in 2025 to $66 billion by 2030. Manufacturers are imposing 20 per cent price increases on year-old purchase orders to maintain delivery schedules. U.S. factories added 5,000 jobs in July, reversing a loss of 113,000 jobs last year, with manufacturing activity hitting its highest level in over four years.
Demand for Generac’s home generators remains soft due to a struggling housing market and high consumer prices for food and gasoline. Other forces influencing manufacturing include a surge in semiconductor plant construction and shifting US tariffs, which some blame for holding back factory expansions. The White House attributes manufacturing growth to President Donald Trump’s policies, citing trillions in manufacturing investments.
Some companies are holding back on expansions, fearing the bubble might burst, even while they reap the benefit of having products in high demand. Barry Powell, North American president of Siemens Electrical Products, said the company mitigates risk by signing multi-year agreements with customers that include significant penalties if targets are not met.
Trey Travis, vice president of operations at Southeastern Hose, noted that while new demand has exploded, there is a fear that if the industry goes into a downturn, it could domino the other way and impact long-time customers. The company is managing this by taking care of loyal customers alongside the new business.
The division in the sector is evident as booming niches contrast with many other parts of manufacturing. The Institute for Supply Management survey showed gloomy mood among many producers in July, highlighting the split between the data centre-driven growth and broader economic pressures.
