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This Earnings Season Will Be a Weird One for Industrial Companies

Inflation and supply-chain shocks have some investors saying the manufacturing recovery has peaked. But some CEOs are buying back shares.

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Illustration: George Wylesol for Bloomberg Businessweek

Another earnings season is under way, and it’s shaping up to be an exceptionally weird one for the industrial sector.

Demand remains robust. U.S. factory output rose in March by more than economists had anticipated, while companies put a higher percentage of their manufacturing capacity to work as supply chains showed signs of stabilizing, according to Federal Reserve data released on April 15. Industrial distributor Fastenal Co. reported its strongest quarterly net sales growth in at least a decade. The push to decarbonize industrial processes and localize more manufacturing work to be closer to the end customer should theoretically support elevated capital spending for years to come.