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

                                  Feb 23, 2024 - Producer Prices Flat in 2023
                                  • Producer prices for hardware manufacturers plateaued (falling by less than 1%) in December compared to a year ago, after rising in 2021 and 2022, according to US Bureau of Labor Statistics data. Meanwhile, employment by hardware, spring, and wire product manufacturers shrank last year while average wages at fabricated metal products manufacturers continued their steady climb, ending 2023 at a new high of $25.82 per hour in December, a 3.7% change compared to a year ago, per the BLS.
                                  • 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 that Home Depot posted a decline in annual sales since 2009 when the housing bubble burst and blew up the US economy.
                                  • Falling mortgage rates are boosting home builder confidence, HBS Dealers reports. While home builder sentiment improved in December – following four consecutive months of decline – it remained well below the benchmark reading of 50. Builder confidence in the market for newly-built single-family homes climbed 3 points to 37 in December, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). “With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look,” said NAHB Chairman Alicia Huey. The feeling that the housing market appears to have passed peak mortgage rates is a positive sign for home building – a driver of demand for home hardware.
                                  • 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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