Space set up around middle of factory for machine (5)
I believe the answer is:
motor
'machine' is the definition.
(motor is a kind of machine)
'space set up around middle of factory' is the wordplay.
'space' becomes 'room' (room is a kind of space**).
'set up' says the letters should be written in reverse.
'around' indicates putting letters inside.
'middle of' means to look at the middle letters.
The middle of 'factory' is 't'.
'room' in reverse letter order is 'moor'.
'moor' enclosing 't' is 'MOTOR'.
'for' is the link.
(Other definitions for motor that I've seen before include "Move fast" , "Travel by car, engine" , "Move quickly" , "Wheels" , "Make good progress" .)