Do I build Factories?

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There is a wide variety of views on whether or not to build factories. It depends on which nation you are playing and how you are playing them.

The increased Industrial Capacity for building more factories is relatively less important in HOI2 than HOI1. However, increasing your Industrial Capacity can have an effect on Research, and your Transport Capacity, which can also be crucial.

How quickly do factories pay for themselves?

A Factory costs 5 IC for a year and then produces a base 1 IC for the rest of the game.

If there are no modifiers, the factory will pay for itself six years after you start to build it. After those six years you will have more production that if you had not built the factory.

If you start the game in 1936 and build many factories immediately you will have higher overall production by 1941. If you are intending to go to war in 1944, this is great news. If you are intending to go to war in 1937, building factories is a bad idea.

This calculation depends hugely on the IC modifier from ministers, technology, peace, and other variables.

Here is a list of some of the factors that affect your effective IC level:

  • The central planning policy slider
  • Your Machine Tools technologies
  • Ministers: Armaments Minister, Intelligence Minister, some Head of Government/Heads of States,
  • For democracies, whether you are at peace
  • Dissent levels
  • Difficulty level

Also at least some of the increase in IC will be diverted to consumer goods.

In this thread on the Paradox forums, [1], Raison D'Etat calculates that a well-played Germany on Normal difficulty building factories in 1936 will break even in August 1940.

This seems a good argument for heavy investment. However, many strong players only play against the AI on Very Hard difficulty, which reduces effective IC by 40% and makes the pure IC effect a very bad deal indeed.

Transport Capacity effects

Transport Capacity is based on your effective IC with another modifier applied.

Exceeding your TC by trying to ship too many supplies and occupy too much enemy territory has serious effects. Your movement rates and Effective Supply Efficiency (hence combat performance) are reduced.

Some players find that the increased TC is a decisive factor which makes them invest in factories. It is very common to have reduced effectiveness in (say) the invasion of Russia through a lack of TC.

Other players are less disturbed by having units at reduced effectiveness by lack of Transport Capacity. Steps that can be taken to mitigate the problem include:

  • giving units 'Supply for Offensive' status
  • having smaller numbers of units
  • granting independence to nations in conquered territory


Building factories that take you over cut-off points (20, 40, 60, 80 IC) for extra Tech Teams clearly yield considerable benefits. This does not apply to most major powers on most difficulty settings.

Readiness for War

Your decision on how many factories to build also depends on whether you need to start building any vital units right away. You may be able to build an Infantry division in 50 days. A Battleship will take 730 days.

If you anticipate needing numbers of battleships in 2 years time you must commence building now, rather than building any factories.

Other Factors

There are also other factors that affect whether you should or should not invest in factories.

  • The amount of resources which you have can alter your strategy in relation to factories. Rather than buying a factory, it may be preferable to trade resources which would otherwise be diverted to factories on supplies, thus maximizing your current IC. Instead of dumping rare minerals and the like on factories, those resources can be traded to gain supplies, meaning you can set your supply slider a bit lower. Although this may not make a big difference, it could lower the effectiveness of a factory.
  • Manpower is also a factor. Obviously, if you have little or no manpower, it may not be wise to waste it on ground divisions, and it may be better to spend a bit on factories before you decide how to invest your manpower.
  • The total benefits of a factory may be bigger than when the factory actually pays for itself in construction. That is because if instead of building a factory, you build infantry, they will continue to gobble supplies until the end of the game. This raises the total cost of buying anything except items that do not consume supplies, such as factories. That means factories may actually pay for themselves sooner - by increasing your overall IC capacity you can build your armies later because you can build more at once, thus also meaning less upgrades. Clearly this is a more risky strategy though.
  • The infrastructure level in the province you want to build the factory in affects the time it takes to bring the factory online. Infrastructure does not effect the actual build time of the factory, only how quickly the IC produced by the factory becomes available after placement, capture, bombing, etc.