The industrial sector is regaining momentum as the resumption in economic activities fuels industrial production. Furthermore, President Biden’s plan to rebuild and reshape U.S. infrastructure, which is due to be voted on in Congress next week, is expected to provide a solid boost to the sector. Therefore, we think it could be wise to bet on fundamentally sound industrial equipment stocks Standex International (NYSE:SXI), Lawson Products (NASDAQ:LAWS), Preformed Line Products (PLPC), and LSI Industries (LYTS). These stocks are rated ‘Strong Buy’ in our proprietary rating system. Read on.As the U.S. economy has recovered from the crippling effects of the COVID-19 pandemic this year, the resumption in activities has been driving the industrial equipment sector’s rebound. With industries rapidly embracing new methods of conducting business and trying to effectively engage with customers digitally, there has been a substantial uptick in demand for solutions provided by equipment manufacturers.
In August, total industrial output climbed 0.3% to 5.9%, while industry capacity utilization increased 0.2% to 76.4%, compared to respective pre-pandemic levels. Investor optimism in the sector is evidenced by the Industrial Select Sector SPDR ETF’s (XLI) 14.4% returns year-to-date.
Furthermore, the U.S. House of Representatives is approaching a Monday deadline to vote on a bipartisan infrastructure spending bill, which, if approved, should propel the growth of the industrial equipment market. So, we think it could be wise to bet on industrial equipment stocks Standex International Corporation (SXI), Lawson Products Inc. (LAWS), Preformed Line Products Company (PLPC), and LSI Industries Inc. (LYTS). These stocks are well-positioned to capitalize on the industry tailwinds and deliver solid returns in the near term.