A16z analysts flag a 9% slide in US electrical equipment production

The US wants to build an AI economy that runs on electricity. The country is making less of the equipment that moves that electricity around. According to analysis shared by a16z, US electrical equipment production has fallen 9% since 2019. Over the same stretch, prices for that equipment rose 69% and power demand from AI kept climbing. The numbers behind the squeeze The a16z findings frame the decline as a capacity problem: US electrical equipment manufacturing capacity was down 9% since 2019 as of mid-2026. The contrast with other parts of the industrial economy is stark. Over the same period, communications equipment grew 110%. Semiconductors rose 77%. Computers were up 16%. The 69% price increase is the highest among the manufacturing categories a16z tracked. For two specific product lines, transformers and switchgear, prices have nearly doubled since 2019. Busy factories, smaller output The most counterintuitive figure in the analysis involves utilization. Electrical equipment plants are running at 87% utilization, the highest level since 2008. Overall manufacturing utilization softened during that time. Electrical equipment plants are the exception: they are running hot. Yet ...