Industrial Goods Sector

AAA

DEFINITION of 'Industrial Goods Sector'

A category of stocks that relate to producing goods used in construction and manufacturing. This sector includes companies involved with aerospace and defense, industrial machinery, tools, lumber production, construction, cement and metal fabrication.

INVESTOPEDIA EXPLAINS 'Industrial Goods Sector'

Performance in the industrial goods sector is largely driven by supply and demand for building construction - residential, commercial and industrial - as well as the demand for manufactured products. When the economy contracts and consumers save more and spend less, activity in this sector drops because companies will postpone expansion and produce fewer goods.

The performance of the industrial goods sector closely follows the performance of the S&P 500.

RELATED TERMS
  1. Energy Sector

    A category of stocks that relate to producing or supplying energy. ...
  2. Transportation Sector

    A category of stocks relating to the transportation of goods ...
  3. Sector

    1. An area of the economy in which businesses share the same ...
  4. Financial Sector

    A category of stocks containing firms that provide financial ...
  5. Basic Materials Sector

    A category of stocks that accounts for companies involved with ...
  6. Utilities Sector

    A category of stocks for utilities such as gas and power. The ...
RELATED FAQS
  1. How does the risk of investing in the industrial sector compare to the broader market?

    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
  2. What option strategies can I use to earn additional income when investing in the ...

    Investors who are bullish on the industrial sector can use a covered call option strategy to earn additional income from ... Read Full Answer >>
  3. What is the average price-to-book ratio in the aerospace sector?

    Aerospace companies under the industrial goods sector scope could provide value-investing opportunities to investors. However, ... Read Full Answer >>
  4. What debt/equity ratio should I look for when investing in industrial companies?

    The average long-term debt/equity (D/E) ratio that you should expect for companies in the industrial goods sector is 146.44, ... Read Full Answer >>
  5. What developed countries have the largest proportion of industrial companies?

    The developed countries with the largest proportion of global industrial companies have remained relatively stable between ... Read Full Answer >>
  6. What dividend yield is typical for companies in the industrial sector?

    The average dividend yield of the industrial goods sector is approximately 1.71%. The industrial goods sector is a group ... Read Full Answer >>
  7. What are some popular ETFs that track the industrial sector?

    As of April 2015, some of the most popular and best performing exchange-traded funds (ETFs) that track the industrial sector ... Read Full Answer >>
  8. Which stocks in the industrial sector pay the highest dividends?

    In the industrial sector, some of the companies that pay the highest dividends include Highway Holdings Limited, OCI Partners ... Read Full Answer >>
  9. What mutual funds can be used for investing in the industrial sector?

    The industrial goods sector provides investors access to companies that engage in activities such as aerospace and defense, ... Read Full Answer >>
  10. How are industrial goods different from consumer goods?

    Industrial goods are made up of machinery, manufacturing plants and materials, and any other good or component used by other ... Read Full Answer >>
  11. What does it mean to invest in base metals?

    Portfolio diversification is a necessity for most investors; it provides a smart way to spread out the risk associated with ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Sector Rotation: The Essentials

    We look at how the market signals impending economic cycles and sector performance during each stage.
  2. Mutual Funds & ETFs

    4 Steps To Building A Profitable Portfolio

    This is a step-by-step approach to determining, achieving and maintaining optimal asset allocation.
  3. Mutual Funds & ETFs

    Shifting Focus To Sector Allocation

    Investing in sectors may trump international investments for providing diversification.
  4. Mutual Funds & ETFs

    Major Blunders In Portfolio Construction

    Do you have the best mix of investments? Find out how to make sure.
  5. Bonds & Fixed Income

    Tips For Recession-Proofing Your Portfolio

    Find out what to do when the sun sets on a burgeoning market.
  6. Mutual Funds & ETFs

    Do Focused Funds Provide a Better Outlook?

    Should you diversify or focus? Read on to decide which will work best for you.
  7. Economics

    What is Industrialization?

    Industrialization is the process of a society, usually a country, transforming itself from an agricultural-based economy to one based on manufacturing. Even then, agricultural output grows as ...
  8. Chart Advisor

    This ETF Will Deliver Upside With Downside Protection

    With markets near all-time highs as naysayers warn of a coming correction, how can you stick around for more gains and still limit downside risk? The answer could be industrials.
  9. Chart Advisor

    Industrials And Cyclicals Back in Focus

    A strong week for the equities saw the S&P 500 SPDR (ARCA:SPY) to a new high, with the Industrial and Cyclical sectors leading the market. With the overall uptrend in equities still in full swing ...

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!