The last year of the decade was a rather odd one for industrials stocks. Based on the performance of a leading industrials ETF, the iShares U.S. Industrial ETF (NYSEMKT: IYJ), the sector slightly outperformed the S&P 500 index in 2019, even as U.S. industrial production growth slowed to just 0.8% compared to 3.9% in 2018. That said, there are five key reasons why 2020 could turn out to be another good year for the industrial sector.
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The trade war took its toll on investor sentiment, and leading indicators of the industrial sector -- such as the Institute for Supply Management Purchasing Managers Index (PMI) -- dropped below 50, which indicates a contraction in the industrial economy.