Building Materials Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,300 building materials distributors in the US purchase and resell a variety of products used in the construction of residential and commercial structures. Companies may offer a wide range of products or specialize in a category, such as roofing materials. Companies often offer related services, such as materials delivery, technical assistance, logistics, design, and fabrication. Customers include contractors, home builders, building owners, and resellers (dealers, home improvement stores).
Dependence on Construction Industry
Demand for building materials is highly dependent on the health of the construction industry, which is cyclical and vulnerable to economic conditions.
Building Materials Cost and Supply
The cost of building materials can vary, depending on pricing trends for underlying commodities.
Industry size & Structure
The average building materials distributor operates out of a single location, employs 25-26 workers, and generates $15.6 million annually.
- The building materials distribution industry consists of about 10,300 companies that employ 266,000 workers and generate about $160 billion annually.
- The industry is concentrated; the top 50 firms account for about 47.5% of industry sales.
- Many companies are small, independent operations and serve a local or regional geographical market.
- Large companies include ABC Supply, Builders FirstSource, and Beacon Roofing Supply. Large home center chains, such as Home Depot and Lowes, are also major suppliers of building materials.
Industry Forecast
Building Materials Distributors Industry Growth
Recent Developments
Feb 11, 2025 - Builders Rank Top Headwinds for 2025
- Except for inflation, which some builders expect to improve this year, the challenges most builders foresee for 2025 are much the same as the ones they faced in 2024, according to a recent survey by the National Association of Home Builders (NAHB). More than three-quarters (78%) of builders said high interest rates will likely be the key problem they face in 2025, down from 91% in 2024. Other significant issues builders expect to face this year include buyers pausing purchases as they wait for interest rates and prices to drop (74% of respondents), cost and availability of developed lots (65%), building materials prices (64%), and cost and availability of labor (64%).
- North American construction and engineering spending in 2025 is expected to grow by 2% after increasing an estimated 6% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. With growth of 19%, the data center sub-sector will lead 2025 nonresidential building construction, followed by public safety (9%), amusement and recreation (7%), and manufacturing (6%). Commercial construction spending is expected to decline 9% in 2025 amid a 6% drop in warehouse demand, which accounts for more than half of annual commercial spending. Lodging construction spending is forecast to fall 7%, and stubbornly high office vacancies are expected to hold new office construction to 2% growth in 2025. Amid high mortgage interest rates and a lack of affordability, single-family construction spending is forecast to rise by 4% in 2025. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 13% in 2025.
- The Dodge Momentum Index (DMI) increased by 5.6% in January 2025 to 225.7 (2000=100), up from the revised December reading of 213.6. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component rose 4.2%, and institutional increased 8.7%. Dodge’s associate director of forecasting, Sarah Martin, said, “Nonresidential planning activity saw diversified growth in January, with every vertical experiencing positive momentum. Uncertainty over fiscal policies, ongoing labor shortages and elevated construction costs will continue to be headwinds to the construction sector. However, further monetary easing and the sizable number of projects in planning should support construction spending in the back half of the year.”
- US private residential construction spending increased 1.5% in December 2024 from November and was up 6% year-over-year. Private residential spending growth in December was led by a 1% rise in new single-family construction spending compared to the previous month, but single-family spending was down 0.8% compared to December 2023. New private multifamily construction spending declined by 0.3% in December 2024 compared to November and was off by 10.5% year-over-year. December’s rise in private residential construction spending marked the third consecutive month of growth.
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