Four Manufacturing Stocks Positioned for Growth as Industrial Sector Accelerates

The manufacturing landscape is showing unmistakable momentum after a prolonged slowdown. Recent data from the Institute of Supply Management reveals that types of manufacturing activity have surged dramatically, with the ISM Manufacturing PMI jumping to 52.6 in January—marking the strongest reading since 2022. This resurgence is reshaping investment opportunities across the industrial sector, particularly in companies that specialize in different manufacturing domains.

The shift carries significant implications for investors seeking exposure to the manufacturing sector. Companies like ATS Corporation, Nordson Corporation, Donaldson Company, Inc., and RBC Bearings Incorporated are well-positioned to benefit from this expansion, each holding a Zacks Rank #2 (Buy) rating. These firms operate across distinct types of manufacturing and industrial specializations, from automation systems to precision components.

Industrial Output Accelerates Across Multiple Manufacturing Segments

The recent ISM report provides compelling evidence that types of manufacturing are expanding broadly. The New Orders Index surged to 57.1% in January—the highest level since February 2022—signaling robust demand for manufactured goods. This represented a dramatic swing from December’s reading of 47.4%, suggesting that orders are flowing back into industrial pipelines after months of weakness.

Production metrics paint an equally encouraging picture. The Production Index climbed to 55.9%, up from December’s 50.7%, indicating that manufacturers are ramping up output in response to rising demand. Any PMI reading above 50 signals sector expansion, and January’s numbers demonstrate clear acceleration.

The Economic Conditions Behind the Manufacturing Rebound

Lower inflation and accommodative monetary policy have created an environment favorable for manufacturing investment. The Federal Reserve cut interest rates by 75 basis points throughout the previous year, easing borrowing costs for manufacturers and reducing price pressures that had weighed on demand. The central bank maintained rates in its current range of 3.5% to 3.75% while signaling openness to additional cuts as inflation stabilizes.

Inflation easing over the past two quarters has also restored consumer and business confidence, driving purchasing decisions. These tailwinds set the stage for industrial stocks to deliver meaningful returns as types of manufacturing benefit from sustained demand growth.

Four Manufacturing Specialists Ready for Expansion

ATS Corporation specializes in automation solutions, designing and building automated manufacturing and assembly systems. With expected earnings growth of 18.9% for the current year and Zacks Consensus Estimates improving 0.8% over the past 60 days, ATS is positioned to capture the automation wave sweeping through types of manufacturing.

Nordson Corporation leads in dispensing and application systems for adhesives, coatings, polymers, and other industrial fluids. The company serves multiple manufacturing segments with microprocessor-based systems for high-volume production. Nordson projects 9.3% earnings growth this year, with Zacks Consensus improving 2.3% over the past two months.

Donaldson Company, Inc. dominates filtration systems and replacement parts globally. Its deep customer relationships and diversified geographic presence position it well across types of manufacturing that depend on advanced filtration technology. DCI expects 10.1% earnings growth, with Zacks estimates up 0.7% over the past 60 days.

RBC Bearings Incorporated manufactures engineered bearings and precision components critical to machinery and mechanical systems across multiple manufacturing industries. The company forecasts 18.6% earnings growth this year, with Zacks Consensus estimates increasing 0.3% over the past two months.

Why This Moment Matters for Industrial Investors

The convergence of strengthening manufacturing activity, easing inflation, and lower interest rates creates a compelling backdrop for industrial equities. Each of these four stocks operates within types of manufacturing that show distinct tailwinds—automation driving productivity, precision components enabling advanced machinery, and filtration systems supporting environmental compliance across industries.

The ISM data confirms that the manufacturing sector has transitioned from contraction to genuine expansion, suggesting this rebound is not a temporary spike but part of a sustainable recovery cycle.