Industries that bear the bruises of the recession are best positioned to perform when a recovery emerges. That’s why exchange traded funds (ETFs) that focus on industrial businesses may be worth some exploring.

Industrials – a sector that includes farm equipment, railroads, heavy machinery and delivery services – are sensitive to economic cycles and business cycles, making them prone to highs and lows. That aside, they have many benefits. [Why Aerospace and Defense Is Feeling Bullish.]

The robustness of an industrials sector is one of the vital signs of an economy. U.S. manufacturing activity rose at its fastest pace in more than five years last month, thanks to a jump in exports and inventory supplies. The rebound in world trade is seen as driving the moves, reports emii.

Nilus Mattive for Money and Markets reports that industrials are good for investors to include in their portfolios because:

  • The sector is nothing if not diverse, covering a range of industries.
  • Industrials are a good value right now, something investors will find appealing in this recovery.
  • These companies are feeling positive, and many of them are raising their dividends. Around 10 industrial companies raised their dividends for the month of February. [Airline ETF Looks Ready to Take Flight.]

Since these economically challenged companies are raising their dividends, they must be making their earnings. MarkFightmaster for Blogging Stocks reports that factory orders are indeed up 0.6% in February, another sign of fundamentals strengthening.

To invest in industrials using ETFs, you have several options. PowerShares‘ transportation fund and Claymore‘s airline fund give nice exposure to two sub-sectors; iShares and State Street have funds that own both U.S. and global industrials, while Rydex has an equal weight industrials fund. And that’s just the tip of the iceberg.