Industry · MFGCalcs Magazine, Issue 1, November 2026
The Factory Got Younger
The American factory hit a record age in 2022, then started getting younger.
By Abe Lathrop. From MFGCalcs Magazine, Issue 1, November 2026, page 23.
In January a Texas fabricated metal manufacturer told the Dallas Fed why it was holding off: “We still are reluctant to make any significant upgrades and improvements with the current new order stagnation except for required capital maintenance.”
The country’s factories had been going the other way. Everything manufacturers own that the Bureau of Economic Analysis counts as a fixed asset, from buildings to machine tools to software, reached a record average age in 2022. Then the average fell three years running, to 12.8 years by the end of 2025, the largest three-year decline since 1968. A machine never gets younger. An average does, when new assets come in and old ones go out.
The buying was real. Manufacturers’ investment in fixed assets rose five straight years, BEA’s figures show, to about $813 billion in 2025, a record in current dollars. In the Chicago Fed’s district, capital spending fell modestly, and business contacts mostly reported buying to replace old equipment, the bank said in the Beige Book released in October.
Others were waiting. In the Kansas City Fed’s August survey, a manufacturer preserving capital and paying down debt this year laid out its plan: “Let’s build the work load up, then come back and make the capital investments in efficiency.” An equipment maker for the plastics industry told the Richmond Fed, in the Beige Book released in June, that customers were holding off on capital investment because they expected oil shortages.
For all the buying, the factory is not young: it is older than in any year from 1948 through 2020, and the record spending came to 13.8% of what manufacturers already owned, a pace beaten in about half the years in BEA’s tables. The figures here blend buildings, machines and software and do not say which plants bought, and prices can move the average as well as purchases.
Machine shops are buying too. AMT, the Association for Manufacturing Technology, reported in October that orders for metalworking machinery from contract machine shops grew faster in August than the market as a whole, and added: “Historically, an uptick in orders from job shops would lead to a general recovery in demand for manufacturing technology.”
For a shop still waiting, the wait has its own price. Producer prices for machinery and equipment have risen every month since October 2020, Bureau of Labor Statistics data show: machinery that cost $100 in December 2019 cost about $141 in September.
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Last reviewed 2026-10-26.