U.S. manufacturing continued to grow through September, although at a slower pace. Regardless of that, industrial exchange traded funds (ETFs) have kept their appeal for investors thanks to decent dividends.

Two words: “less bad.” That’s what the manufacturing numbers were last month, and that’s enough for optimism these days, reports Ilya Leybovich for Industry Market Trends. The ISM report found that 13 of the 18 manufacturing industries tracked experienced growth last month. It’s also worth noting that it was still the 14th straight month of growth. [Copper ETFs: Why Higher Prices May Stick.]

Will McClatchy for ETF Zone reports that in this recession, manufacturing is leading the way out. This has become especially true in the wake of weakened consumer spending, which can’t be counted on right now. But like many companies right now, industrials remain vulnerable to the credit crunch and many are hoarding cash rather than putting it to work. [Get Ready for Onslaught of Physical Metal ETFs.]

That aside, investors still like this sector because a) it’s still growing and b) good yields are hard to find these days. There are a number of ways to play industrial growth: you can seek out funds with “industrial” in the name or look for other areas that might benefit from upticks in industry, including:

  • iShares Silver Trust (NYSEArca: SLV): Silver is not just a precious metal – it’s heavily used in industry. SLV is a physically-backed ETF.
  • First Trust ISE Global Copper (NASDAQ: CU): Copper is a popular industrial metal that’s primarily used in wires and pipes. No modern building can get by without it.
  • Market Vectors Steel ETF (NYSEArca: SLX): Steel is the building block of any modern skyscraper.
  • SPDR Dow Jones Industrial Average (NYSEArca: DIA): About one-third of the companies in the Dow are manufacturing plays, so this ETF is less of a pure-play on the sector’s growth.
  • ProShares Ultra Industrials (NYSEArca: UXI): If you’re looking for an industrials play with more “oomph,” take a look at this leveraged offering.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.