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
Apr 10, 2025 - Tariffs to Drive up Flooring Prices
- Research by a Bank of America analyst says the Trump administration’s reciprocal tariff regime will likely increase prices for several types of flooring materials. The BoA study found that 40% of ceramic tile is imported, with 35% of imports coming from Italy and Spain, and Mexico and India each accounting for 14%. Imports make up 80% of the US luxury vinyl tile market, of which 50% comes from China. On April 9, the Trump administration paused its reciprocal tariff agenda for 90 days for most countries but left in place a baseline 10% import duty on all countries except China, which faces total tariffs of 145%. Canada and Mexico are not subject to the new 10% baseline tariffs, and goods trading under the US-Mexico-Canada Agreement will remain duty-free. Any increase in building material producer prices that distributors cannot pass to customers could eat into margins.
- The continued rise in the median age of US housing stocks may present opportunities for building materials distributors. In an April report, National Association of Home Builders analysis of US Census Bureau data showed that nearly half of owner-occupied homes were built before 1980. In 2023, the median age of owner-occupied homes reached 41 years, up from 31 years in 2005. Median home age has increased since the Great Recession when new housing production dropped dramatically. Since then, home building activity has not kept pace with demand. US homes require more maintenance and repairs as they age, driving remodeling spending. The lock-in effect of low mortgage rates during the pandemic is also prompting homeowners to renovate rather than move and face a higher interest rate.
- The total value of construction put in place increased 0.7% in February compared to January, according to the US Census Bureau. Spending on nonresidential projects rose 0.3% to a record $1.26 trillion. Residential spending grew 1.3%. Key areas of nonresidential building construction spending growth included amusement and recreation (up 1.3% in February over January) and commercial (+1.1); most other nonresidential building segments posted flat or negative growth. While public nonresidential spending was up 6.1% in February over the same month in 2024, private nonresidential spending has not kept pace, growing just 2.5% over the same period. In a press release, Associated Builders and Contractors Chief Economist Anirban Basu said, “The mix of high interest rates, tight lending standards, and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”
- Lumber futures fell when President Trump unveiled his reciprocal tariff plan on April 2, 2025, and Canadian lumber was not among the targeted products, according to The Wall Street Journal. Lumber prices had been ticking up amid anticipated increases of existing levies on Canadian lumber imports. Prices may have also drifted downward due to expectations of weaker housing demand as tariffs increase the costs of building homes, reducing affordability. On April 9, Trump put a 90-day pause on reciprocal tariffs for most countries but kept the baseline duty at 10%. The Administration said Canada and Mexico would be subject to the 10% baseline when they’d been spared just days before. Lumber futures ticked upward after Trump’s pivot on reciprocal tariffs. Before Trump’s tariff pause, a UBS analyst estimated reciprocal tariffs could add about $6,400 to the cost of building the average house.
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