Industrial Production Growth Signals Continued Manufacturing Technology Demand in 2026

Industrial production and capacity utilization increased at the start of 2026, pointing to continued strength in manufacturing activity and potential sustained demand for manufacturing technology.

According to the latest report from the Board of Governors of the Federal Reserve System, industrial production across the U.S. economy rose 0.7% from December 2025 to January 2026. Capacity utilization increased by 0.5% during the same period.

Within the manufacturing sector, production increased 0.6% in January, while capacity utilization rose 0.4%. The Federal Reserve also revised its initial December 2025 estimates downward for both measures.

Manufacturing Technology Outlook

The January gains follow what industry groups described as historically strong manufacturing technology orders in December 2025.

Christopher Chidzik, principal economist at AMT – The Association For Manufacturing Technology, said the increase in industrial activity suggests that late-2025 momentum may extend into the new year.

Chidzik also referenced the January 2025 jobs report, which showed manufacturing employment increasing for the first time since November 2024. While broader employment figures may be subject to revision, he noted that manufacturing job revisions could be less significant if hiring was tied to increased output levels reflected in the latest industrial production data.

Broader Manufacturing Indicators

Rising industrial production and capacity utilization are commonly viewed as leading indicators for capital investment in manufacturing technology, including CNC machinery, automation systems and metalworking equipment. As output levels increase, manufacturers may expand production capacity, invest in new machinery or upgrade existing equipment to maintain throughput and efficiency.

Although economic forecasts remain subject to changing financial conditions and broader macroeconomic factors, January’s data indicates continued stability in U.S. manufacturing entering 2026.