The Industrial Renaissance: Why Fidelity's Focus on Reshoring and Aerospace Could Power 2025 Gains

The industrial sector is primed for a comeback in 2025, and the Fidelity Select Industrials Portfolio isn’t just betting on it—it’s doubling down. Let’s unpack the themes driving this rally, the companies leading the charge, and why now could be the time to jump in.

The Reshoring Revolution: Building America’s Future

The biggest tailwind? The $1.9 trillion pipeline of U.S. infrastructure projects—only 25% of which are under construction. This is a goldmine for companies that can supply the equipment, parts, and expertise needed to rebuild America’s roads, bridges, and energy grids.

Take United Rentals (URI): With construction booming, this equipment rental giant is leasing cranes, bulldozers, and everything in between. . URI’s stock has already surged 40% since late 2023 as demand spikes. Meanwhile, Trane Technologies (TT) is cashing in on the push for energy-efficient HVAC systems, a cornerstone of the Inflation Reduction Act’s green goals.

Aerospace: Flying High After Grounded Years

The airline industry is in crisis mode—and that’s great news for parts suppliers. Airlines are keeping aging planes aloft longer due to a shortage of new aircraft. Companies like GE Aerospace (GE), which dominates aircraft engines, and TransDigm Group (TDG), the king of aftermarket parts, are minting money. Even FTAI Aviation (FTAI), which leases engines and offers repair services, is soaring.

. GE’s comeback? It’s real.

Manufacturing: From Overstocked to Overdrive

After a post-pandemic inventory glut, manufacturers are finally trimming excess stock. This sets the stage for a rebound in orders. Ingersoll Rand (IR) and Parker Hannifin (PH), which make industrial components, are positioned to capitalize. And don’t overlook the trucking giants: Knight-Swift (KNX) and Old Dominion Freight Line (ODFL) are the unsung heroes of this recovery.

. When freight picks up, these stocks follow—like a trailer to a semi.

Housing’s Quiet Comeback

Lower mortgage rates could ignite home remodeling, not new construction. Fortune Brands Innovations (FBHS) (faucets, cabinetry) and AZEK (AZK) (outdoor building materials) are ready. Even Simpson Manufacturing (SSD), which makes roofing and framing systems, is a hidden gem here.

Policy Winds at the Back

The U.S. government’s push for reshoring—via the CHIPS Act and infrastructure spending—is a multi-year tailwind. And if the Fed cuts rates, it’ll supercharge industrial demand.

The Risks? Sure, But the Upside Is Bigger

Commodity price swings, global slowdowns, or regulatory hiccups could trip the sector. But with $1.9 trillion in projects still on the drawing board and aging fleets needing repair, this is a sector with built-in demand.

Conclusion: Load Up on These Industrial Leaders—Now

The Fidelity Select Industrials Portfolio isn’t just a bet on stocks—it’s a bet on America rebuilding itself. The data is clear: reshoring, aerospace, and housing are the engines of this rally.

• URI: Leading infrastructure’s charge—own it.
• GE and TDG: The aerospace duo you can’t ignore.
• FBHS and SSD: The remodeling boom’s backbone.

This isn’t a sector to dabble in—this is a sector to dominate. The numbers back it up: with only a quarter of those $1.9 trillion projects underway, the best is yet to come.

Time to get industrial—or get left behind.

Final Note: Past performance ≠ future results. But when government policy, pent-up demand, and corporate resilience align, it’s time to act. The industrial renaissance is here—don’t miss the train.