Demand from US data-center boom radiates out through factory supply chains

Generac, a Wisconsin-based company known for manufacturing backyard generators, is investing $250 million to produce advanced generators for data centers. Currently, the company has a $1.6 billion order backlog and aims to hire around 1,000 workers, a 10% increase in its workforce. Generac CEO Aaron Jagdfeld stated that the company is unsure about the duration of this build-out.

Demand for data centers has expanded to various industries, including cooling systems, electrical transformers, and construction machinery. Companies such as Timken, which manufactures steel bearings, and Siemens, which plans to invest over $200 million in new plants, have also experienced growth due to the data center boom. U.S. factories added 5,000 jobs in July, marking a reversal from the previous year's decline.

However, the mood among many producers remains pessimistic, as high prices for food and gasoline deter big-ticket purchases. Some companies are implementing price increases to maintain delivery schedules, while others are cautious about potential market bubbles.