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Items utilized by other businesses

Industrials is a vague term indeed, but it is generally used when talking about companies manufacturing products used by other companies. Often in the form of large machines, vehicles, or unique tools. Like a Caterpillar excavator, for example. It could also be utility companies like railroad operators.

Numerous established businesses

Many industrial giants have been immensely important in shaping the world we live in today. Their often hundred-plus-year-old history makes them great for case studies regarding both entrepreneurship and market cyclicality.

Most industrial companies are prone to underperforming during inevitable market downturns, thanks to the cyclicality of their demand. Supply chains are also highly important for industrial companies, as they often ship heavy, large products or huge volumes globally.

Four main industrial sub-sectors:

  1. Capital goods. Probably the first thing people think about when hearing the word “industrials.” These are the companies that manufacture heavy machinery that is used in the production of other goods.

  2. Aerospace and defense. Aircraft and weapons system manufacturers, often with the national governments as customers. Manufacturers of rockets and other hardware for space exploration are also included in this sub-sector.

  3. Transportation and logistics. This segment includes some of the largest industrial companies, such as airlines, railroad, trucking, and parcel delivery companies that transport people and goods worldwide.

  4. Construction equipment and building supplies. Producers of the machinery and equipment that are used to build our cities.