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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jul 10, 2024 - Construction Spending Flat
                                • The total value of construction put in place decreased by 0.1% in May 2024 compared to the prior month, according to the US Census Bureau. Spending for nonresidential projects in May declined 0.1% from April, and residential spending fell by 0.2%. Within the nonresidential building segment, the only project categories to post growth in May were public safety (up 0.2%) and amusement and recreation (0.1%). Lodging spending was flat, office and healthcare projects were down a bit over 1% each, and commercial spending declined 0.5%. Education facility spending dropped 0.2%.
                                • A trend in smaller lot sizes for single-family detached homes has accelerated in recent years, according to the latest Survey of Construction by the US Census Bureau. Even as more families decamped to suburban areas seeking more space during the pandemic, lot sizes have continued to shrink. In 2023, lot sizes of less than 0.16 acres (less than 7,000 square feet) accounted for 40% of new single-family home sales compared to 30% in 2011. The share of lots under 0.16 acres has risen two percentage points since the pandemic began. Shrinking lot sizes suggest that firms that build homes speculatively have reduced lot and home sizes to cope with lot shortages and to offer more affordable homes as housing costs have risen.
                                • Low- to medium-density multifamily building construction has grown to account for a larger share of the overall multifamily market in recent years, according to National Association of Home Builders Analysis of US Census Bureau data. In 2024, there were 450,000 multifamily housing unit completions, marking the highest level in 37 years. Of those, 216,000 were buildings with fewer than 50 units, which was the largest share for low- to medium-density buildings since 2006.
                                • Demand for building design services slipped in May from the prior month, as architectural billings remain soft, according to a June report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 42.4 in May from April’s reading of 48.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 52.1 in May compared to 54.8 in April, and the index for the value of new design contracts decreased from 49.2 to 45.6. The AIA’s Chief Economist, Kermit Baker said, "The decline in the May ABI score continues a year and a half of weakness in design billings at US architecture firms. However, firms only reported modest declines over the first half of this period. Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession."
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