Hardware Manufacturers
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 510 hardware manufacturers in the US primarily produce metal hardware, including hinges, handles, brackets, keys, and locks. Firms typically develop and engineer products and systems designed for specific applications, such as aircraft, appliances, motor vehicles, or construction. Large firms produce related products like tools and electronic security products. Other related products include nuts, bolts, screws, rivets, washers, nails, and spikes.
Private Label Competition
The commodity status of many hardware products like hinges and basic locks creates ripe opportunities for private-label goods and low-priced imports as differences in quality are marginal.
Variable Material Costs
The cost of raw materials for hardware products, which include steel, zinc, and brass, can vary and affect margins and cash flow.
Industry size & Structure
The average hardware manufacturer employs about 59 workers and generates about $19.2 million annually.
- The US hardware manufacturing industry consists of about 510 companies that employ about 30,000 workers and generate between $9 billion and $10 billion annually.
- The industry is highly concentrated; the top 50 companies account for about 80% of industry revenue.
- Large firms, which include Allegion, TriMark Corp, and The Hillman Group, may offer a portfolio of related products.
Industry Forecast
Hardware Manufacturers Industry Growth
Recent Developments
Oct 23, 2024 - Remodeling Spending to Rebound in 2025
- Analysts and building-products executives are forecasting a rebound in renovations next year, The Wall Street Journal reported in October citing a new outlook from the Joint Center for Housing Studies (JCHS) at Harvard University. The JCHS’s Leading Indicator of Remodeling Activity forecasts repair and renovation spending will return to growth next summer and that spending should reach an annual rate of $477 billion by next October. That would approach the record annual rate of $487 billion reached a year ago, before high interest rates dampened activity. Falling interest rates and sharply rising property values will make it less expensive for US homeowners to tap home equity loans to pay for big projects, including new kitchens and bathroom remodels, driving demand for tools and home hardware. Lower rates should also boost new home construction and sales of existing homes, further driving demand for hardware.
- Producer prices for hardware manufacturers dipped 1% in July compared to a year ago after rising by 1.9% in the previous July-versus-July comparison, according to the latest US Bureau of Labor Statistics data. Following a steep runup that began in 2021 and peaked in February 2023, industry producer prices have essentially plateaued. Employment by the industry dipped by 0.6% year over year in July, while average wages at fabricated metal products manufacturers rose 6.5% on an annual basis in August to $26.59 per hour, a new high, BLS data show.
- The Home Depot – a bellwether for consumer spending and the housing market and a leading seller of home hardware – reported disappointing results in the second quarter and said it expects sales to weaken in the latter half of the year as high interest rates cause consumers to become more cautious, according to an August press release. Excluding acquisitions, comparable sales (sales at stores open more than a year) for the second quarter decreased 3.3%, and comparable sales in the US fell 3.6%. Looking ahead, the company expects comparable sales to decline between 3% and 4% for the 52-week period compared to fiscal 2023. The company’s CFO told CNBC that homeowners are now deferring projects due to a “sense of greater uncertainty in the economy.”
- Homeowners spent $463 billion on renovations in the first quarter, according to the Harvard Joint Center for Housing Studies Leading Indicator of Remodeling Activity (LIRA), or about $26 billion less than the peak of renovation spending in the third quarter of 2023. The LIRA report predicted a more than 7% spending decline in remodeling dollars in Q3 2024, despite a modest rise to $451 billion projected moving into the new year. Spending on home renovation projects is forecast to decline by $12 billion in the first quarter of 2025. Kitchens remain the most renovated rooms (29%), followed by guest bathrooms (27%) and primary bathrooms (25%). The percentage of homeowners who spent $25,000 or more on home renovations increased to 51% in 2023, a steady rise since 2020. Remodeling activity is a demand driver for tools and home hardware.
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