when the economy contracts during recessions activity in this sector drops because companies postpone expansion and produce fewer goods however with this sector covering a wide range of subsectors there is usually at least one area of growth in the industrial goods sector the industrial goods sector goes through life cycles that see different subsectors in growth phases 
the major stages of the growth cycle are accelerating growth decelerating growth accelerating decline and decelerating decline investors do well when they pay attention to the industry trends and progression of the growth cycle companies in the accelerating growth and decelerating decline phases have the best performance and are given higher multiples due to their upcoming growth many of the subsectors go through bullish growth cycles lasting for years before seeing a retraction for example the aerospace and homebuilding sectors have both gone through these cycles other areas such as industrial conglomerates and waste management have provided steady streams of revenue generation the industrial goods sector s performance 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 industrial goods sector statisticsthe bureau of labor statistics bls is a valuable resource for investors and analysts at the sector level the industrial goods sector is listed as the goods producing industry and is broken down by subsector in its reports the bls provides information like employment union membership growth projections hourly wages and fatalities injuries investors can interpret these statistics to determine growth cycles as of april 2024 the industry employed 21 82 million people including 15 54 million people in production and non supervisory roles 2the u s census bureau publishes monthly data on new orders of capital goods broken down into various subsectors which can provide powerful insights into long and short term trends in the industrial goods sector the agency reported 100 42 billion in new orders of capital goods 3subsectors of the industrial goods sectoras noted above the industrial goods sector includes the following subsectors the industrial goods sector includes some of the largest companies in the united states some examples include honeywell hon union pacific unp caterpillar cat 3m mmm and boeing ba the dow jones industrial average djia is a widely watched benchmark index in the u s containing 30 blue chip stocks weighted heavily to the industrial goods sector when the index initially launched in 1896 it included only 12 companies those companies were primarily in the industrial sector including the railroads cotton gas sugar tobacco and oil in the early 20th century the performance of industrial companies was typically tied to the overall growth rate in the economy that cemented the relationship between the index s performance and that of the overall economy even today a strong performing dow equals a strong economy while a weak performing dow indicates a slowing economy for many investors 