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 540 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 54 workers and generates about $18.5 million annually.

    • The US hardware manufacturing industry consists of about 540 companies that employ about 29,075 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Apr 23, 2024 - Prices, Wages Unchanged
                                  • Producer prices were essentially unchanged in March compared to a year ago after rising 4.1% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Tepid demand from the construction sector – a customer industry for hardware – is keeping a lid on price increases. Meanwhile, employment by hardware, spring, and wire product manufacturers grew just 1% in January year over year, while average wages at fabricated metal products manufacturers were flat (up less than 1%) over the same period, BLS data show.
                                  • Housing starts – an indicator of future demand for home hardware – slid in March, according to Census Bureau data. Following a surge in residential construction in February, March housing starts fell 14.7% to a seasonally adjusted annual rate of 1,321,000 and were down 4.3% year over year, according to government data. High-interest rates factored heavily in the nearly 15% decline in total housing starts, according to the National Association of Home Builders. The average long-term US mortgage rate topped 7% in April, its highest level in nearly five months. Single-family housing starts fell 12.4% in March versus February as interest rates increased and multifamily production fell as builders faced tighter financing conditions. And with single-family permits also down 4.3% in March vs February, single-family production will likely decline again in April, HBSDealer reports.
                                  • The Home Depot, the nation’s largest hardware and home improvement chain, saw its sales fall last year, the company reported in February. Sales for fiscal 2023 (ended January) were $152.7 billion, a decrease of 3% from fiscal 2022. Comparable sales for fiscal 2023 fell 3.2%, and comparable sales in the US decreased 3.5%. “After three years of exceptional growth for our business, 2023 was a year of moderation,” said president and CEO Ted Decker. High mortgage rates and inflation caused customers to pull back on home improvement projects last year. 2023 was the first time Home Depot posted a decline in annual sales since 2009, when the housing bubble burst and blew up the US economy.
                                  • Spending on home improvement projects and repairs is expected to decrease at a “moderate rate,” according to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University (JCHS). The latest Leading Indicator of Remodeling Activity (LIRA) report, which provides a short-term outlook of national home improvement and repair spending for owner-occupied homes, projects a bigger slowdown in home improvement spending than was forecast in July. The report expects annual owner expenditures for home updates and maintenance to decline by 7.7% through Q3 2024, depressing demand for building materials and home hardware. “The level of annual spending on improvements and repairs is projected to fall from $489 billion today to $452 billion over the coming four quarters,” says Abbe Will, associate project director of the Remodeling Futures Program. In October, the National Association of Home Builders reported that remodeler confidence had decreased in Q3.
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