Hardware Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 570 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.

Competition from Private Label Products

The commodity-like nature of many hardware products, like hinges and basic locks, creates ripe opportunity for private label goods and low-priced imports since the differences in quality are marginal.

Variable Raw Material Costs

The cost of raw materials for hardware products, which include metals like steel, zinc, and brass, can vary and affect margins and cash flow.

Industry size & Structure

The average hardware manufacturer employs about 50 workers and generates about $15 million annually.

    • The US hardware manufacturing industry consists of about 570 companies that employ about 30,000 workers and generate between $8 billion and $9 billion annually.
    • The industry is highly concentrated; the top 50 companies account for over 80% of industry revenue.
    • Large firms, which include Allegion, Spectrum Brands, and The Hillman Group, may offer a portfolio of related products.
                                  Industry Forecast
                                  Hardware Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 4, 2022 - Remodeling Spurs Demand for Home Hardware
                                  • Remodeling projects and spending on home remodels, a driver of demand for home hardware, are at their highest rates since 2018, according to the 2022 Houzz & Home Study. In 2021, 55% of homeowners remodeled their living spaces, up from 53% in 2020 and 54% in both 2019 and 2018. Median spend on remodeling projects increased 15% last year and an additional 20% this year, for a median spend of $18,000. Kitchen remodels remain the most popular projects among homeowners, with spending in 2021 up 25%, from $12,000 in 2020 to $15,000 in 2021. Market fundamentals, including limited and aging housing stock, continue to drive demand for home remodels, according to the study.
                                  • Sales of hardlines, a major product category for The Home Depot and Lowe’s that includes hardware, tools, and garden products, increased at both chains in the fiscal year ending in January 2022. Hardlines sales rose 14% at The Home Depot, while Lowe’s reported a 2.5% increase for the year. Comparable store sales of hardware posted a single-digit gain, according to Home Depot’s annual report. Hardware sales at Home Depot and Lowe’s topped $7.8 billion and $4.5 billion, respectively, in the last fiscal year. Large hardware retailers are major buyers of products made by hardware manufacturers.
                                  • Hardware manufacturers are raising prices to compensate for higher material costs. In March 2022, prices jumped 24% for hardware overall compared to a year ago. By major category, prices increased 32% for furniture hardware; 16.5% for building, cabinet, and lock hardware; and 37% for motor vehicle hardware.
                                  • Industry employment is slowly recovering from the losses experienced during the coronavirus pandemic. Employment in the hardware manufacturing industry rose 2.8% in February 2022 compared to a year earlier but was down 2.5% from pre-pandemic February 2020. Industry employment was on a slow but steady annual rise until the pandemic struck.
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