Industrials poised for growth as market moves beyond tech

Binaya Dahal

Journalist

17 December 2025

Industrials are positioned for significant growth next year, Capital Group’s new report claims, as investors increasingly look beyond tech-heavy markets to more diversified opportunities across sectors, regions and asset classes.

The firm’s 2026 outlook points to rising opportunities as industrials capture growth from automation, green energy and large-scale infrastructure investments.

Investment Director at Capital Group, Matt Reynolds said industrials are capitalising on long-term structural trends often overlooked by mainstream investors.

“This sector spans businesses riding powerful, long-term structural trends: surging aerospace demand, accelerating automation, and the global shift toward sustainability, including the transition to electric vehicles,” Reynolds said.

He adds that the sector is actively reinventing itself to meet the demands of a modern world obsessed with technological innovation.

“Once labelled ‘old economy,’ they’re now at the forefront of automation and efficiency – non-negotiables in today’s world,” he said.

“Additionally, many industrial players are benefiting from the massive capital flowing into data centre buildouts. They supply essential infrastructure – from power distribution systems to advanced cooling solutions – enabling high-intensity processing to run seamlessly.”

Meanwhile, Capital Group’s Chief Investment Officer, Martin Romo said that the global economy has remained surprisingly resilient despite various geopolitical and financial pressures.

“Tariffs generally have stabilised, fiscal stimulus supports growth, and many banks are easing. AI is fuelling innovation, though valuations remain high,” Romo said.

The outlook sees a reacceleration in global growth, supported by easing trade tensions and governments globally injecting large-scale stimulus into critical infrastructure and defence projects.

However, Fixed Income Portfolio Manager Chitrang Purani has urged investors to remain disciplined and watchful of a potential headwind that could weigh down consumer activity.

“The biggest question facing investors is whether the labour market weakness will weigh on consumption. That would increase the risk of a sharper downturn in growth,” Purani said.