Metal Fabrication Industry Shows Strong Recovery Signals with NN Inc. Assurance Leading the Charge

The metal fabrication and procurement sector is experiencing a decisive turnaround that signals sustained growth ahead. Industry leaders including NN Inc., TriMas Corp., and GrafTech International are well-positioned to capitalize on this resurgence. Recent economic indicators underscore an industry on the verge of significant expansion, supported by both macroeconomic factors and company-level operational excellence.

Manufacturing Index Points to Industry Resurgence

The most compelling evidence of sector recovery comes from recent manufacturing data. The Institute for Supply Management’s manufacturing index surged to 52.6% in January 2026, marking a return to expansion territory after a full year of contraction. More notably, the New Orders Index climbed to 57.1%—its first growth reading since August 2025—indicating sustained demand momentum ahead.

Production metrics paint an equally optimistic picture. The Production Index reached 55.9%, up sharply from 50.7% in December, marking its highest level since February 2022. Across these three critical indices, the fabricated metal products industry stood out as one of the few sectors recording expansion across all measurements. This rare alignment suggests a durable recovery rather than a temporary rebound.

Strategic Cost Management and Automation Fuel Growth

Companies in the sector are deploying multiple strategies to sustain margin improvement amid external headwinds. The industry has addressed sustained pressure from higher labor, freight, and fuel costs through deliberate pricing adjustments and supply chain optimization. Many manufacturers are diversifying supplier bases and modifying sourcing strategies to mitigate tariff impacts while maintaining competitiveness.

Automation investments represent another key growth catalyst. Industry participants are increasingly deploying advanced technologies to reduce labor dependency and enhance operational efficiency. Combined with continued product innovation and development, this technological pivot positions the sector for long-term expansion. Expected growth in key end-use markets—including aerospace, automotive, and general manufacturing—should drive sustained demand for metal fabrication services over the coming years.

NN Inc., TriMas, and GrafTech Lead Market Recovery

Among sector participants, three companies demonstrate exceptional positioning. NN Inc. is executing a multi-year transformation that remains firmly on track to deliver record adjusted EBITDA and positive free cash flow. The company’s pivot toward higher-margin products in attractive end markets, combined with disciplined cost optimization and rationalization of underperforming operations, reflects sophisticated execution. With its largest sales growth team and an opportunity pipeline exceeding $800 million in potential annual revenue, NN Inc. offers assurance of sustained momentum. The company has moved up 16.7% in Zacks Consensus Estimates over the past 60 days and carries a Zacks Rank of 2, with an estimated long-term earnings growth rate of 45%.

TriMas Corp. continues benefiting from strong demand in the beauty and personal care packaging segment. Recent capacity investments and bold cost management initiatives are expanding margins, while its divestiture of the Aerospace segment sharpens strategic focus. A bolt-on acquisition strategy targeting complementary product categories and end markets supports long-term portfolio growth. The company’s fiscal 2026 earnings estimate has risen 1.6% in recent weeks, indicating projected year-over-year growth of 20.2%. TriMas also carries a Zacks Rank of 2.

GrafTech International demonstrated remarkable sales momentum, with Q3 2025 volumes rising 9% year over year, driven by a 53% surge in United States sales. The company’s strategic geographic rebalancing is paying dividends as it captures U.S. market share gains. Management’s 8-10% projected volume growth for 2025 reflects confidence in sustained demand. Importantly, GrafTech achieved a 10% reduction in cash cost of goods sold per metric ton, demonstrating cost discipline. GrafTech also holds a Zacks Rank of 2, with improving loss metrics forecast for 2026.

Valuation Metrics Suggest Opportunity in Metal Products

From a valuation perspective, the metal fabrication sector offers compelling relative value. The industry currently trades at an EV/EBITDA multiple of 10.79X, a significant discount to both the broader S&P 500’s 19.05X and the Industrial Products sector’s 19.78X. Over the past five years, the sector has ranged from 4.58X to 13.46X, with a median of 7.76X, suggesting current valuations remain reasonable relative to historical norms.

This valuation backdrop, combined with positive earnings momentum and the sector’s outperformance this year (up 50% versus the Industrial Products sector’s 15.5% gain), indicates the market may still underappreciate the sector’s recovery trajectory.

Sector Outlook Remains Constructive

The Zacks Metal Products - Procurement and Fabrication industry currently holds a Zacks Industry Rank of 55, placing it in the top 23% of 244 ranked industries. Historical analysis shows that top-ranked industries outperform bottom-ranked peers by more than 2 to 1, providing statistical backing for the sector’s near-term prospects.

With manufacturing recovery confirmed by multiple indicators, cost pressures being actively managed through pricing and automation, and three leadership companies—NN Inc., TriMas, and GrafTech—executing disciplined strategies, the metal fabrication sector appears well-positioned for sustained expansion. The assurance these companies provide, combined with favorable industry dynamics, suggests opportunity for investors seeking exposure to industrial recovery themes.