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
Jun 23, 2024 - Wages Rise to New High
- Employment by makers of hardware, spring, and wire products grew 1.4% in April year over year, while average industry wages extended their steady climb, increasing 4.4% in May to a new high of $26.02 per hour, according to the latest US Bureau of Labor Statistics data. Meanwhile, producer prices for hardware manufacturers dropped 1.3% in April compared to a year ago after rising 3.5% in the previous annual comparison. The gradual downward trend in industry producer prices from their peak in early 2023 is consistent with cooling inflation at the wholesale level overall, down 0.2% in May, the BLS reported in June.
- 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 new LIRA report predicts 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.
- 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.
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