associate custom post type with tags with specific pages

I have done this which seems to work but not sure if the right way to
go about it?

Yes, you can create a custom Page template which displays posts in your custom post type, and use that template with those “industry” pages.

And if you want, you can create a single Page which will handle all the “industry” requests/URLs like /industry/woodworking. And then you can use add_rewrite_rule() to add a custom rewrite rule which redirects the requests to that Page.

Or you can also redirect them to the tag archives. Example:

add_action( 'init', function(){
    add_rewrite_rule( '^industry/woodworking',
        'index.php?tag=woodworking&post_type=Products',
        'top' );
} );

Just noticed that this only works with single words. As soon as a tag
word has a space in it then it doesn’t pick it up.

As pointed in my comment, that’s because the tag parameter expects one or more tag slugs and not names. Examples:

• 'tag' => 'tag-one, tag-two' — correct.

• 'tag' => 'Tag One, Tag Two' — incorrect.

You can check the full parameters list here.