Companies that manufacture and/or distribute capital goods, such as construction, engineering, industrial machinery, commercial services, and electrical equipment.
The industrial goods sector includes organizations involved with aerospace and defense, industrial machinery, tools, lumber production, construction, waste management, manufactured housing, and cement and metal fabrication. The industrial goods sector is largely driven by supply and demand for building construction in the residential, commercial, and industrial real estate segments, as well as the demand for manufactured products. Big names in this $5 trillion sector include UPS and Boeing.
When the economy contracts during recessions, activity in this sector drops as companies postpone expansion and produce fewer goods. Many of the industries in the Industrial Goods Sector go through bullish cycles lasting for years before seeing a retraction. For example, aerospace and homebuilding. Other areas, such as industrial conglomerates, logistics, and waste management, have provided steady streams of revenue generation as demand does not decline (as much) in poor economic environments.
