Hardware, Plumbing & HVAC Distributors
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 9,600 hardware, plumbing, and HVAC/R distributors in the US consolidate a variety of products from many different manufacturers to offer customers wide selection, reasonable prices, and a single point of contact. Distributors may sell a combination of product categories or specialize.
Construction Drives Demand
Hardware, plumbing, and HVAC distributors depend on construction projects as major sources of revenue.
Consolidation Continues
Distributors continue to expand into new industries and geographical markets or gain market share via acquisitions.
Industry size & Structure
A typical hardware, plumbing, HVAC and refrigeration distributor operates out of a single location, employs about 32 workers, and generates $24 million annually.
- The hardware, plumbing, and HVAC/R distributor industry consists of 9,600 companies, employs 310,000 workers, and generates about $231 billion annually.
- Most distributors are small, independent operations - 52% operate out of a single location and 79% have fewer than 20 workers.
- Customers include building contractors, residential and commercial builders, dealers, hardware retailers, government accounts, and industrial and institutional customers.
- Large companies include Ace Hardware, Ferguson, MRC Global, Hajoca, Watsco, DNOW (formerly NOW Inc.), and HD Supply.
Industry Forecast
Hardware, Plumbing & HVAC Distributors Industry Growth
Recent Developments
Nov 25, 2024 - Single-Family Permits Rise, Housing Starts Drop
- The number of building permits issued for single-family, privately-owned housing units, a demand driver for appliances, increased 0.5% month-over-month but declined 1.8% year-over-year in October 2024. Single-family housing starts fell 6.9% month-over-month and decreased 0.5% year-over-year in October. Single-family housing completions dropped 1.4% month-over-month and fell 0.2% year-over-year in October. The decline in homebuilding activity was partly due to project disruptions from Hurricane Helene in late September and Milton in October, according to Reuters. High interest rates and a lack of affordability also continue to hinder the US housing market.
- For the tax year 2023, about 2.3 million tax returns utilized the Energy Efficient Home Improvement credit (25C tax credit) under the Inflation Reduction Act (IRA) of 2022, according to the Internal Revenue Service’s (IRS) most recent clean energy tax credit statistics. The 25C tax credits, which are based on 30% of the improvement’s cost, help homeowners pay for qualifying energy-efficiency improvements to their primary or secondary residences. The credits include a total annual credit of $2,000 for heat pumps and heat pump water heaters, and $600 for efficient AC units, efficient heaters/boilers, and efficient water heaters. The credits are available until 2032, and the combined annual maximum credit is capped at $3,200. In the 2023 tax year, the most expensive type of improvement claimed was for purchasing and installing electric and gas heat pumps, with an average cost of $11,213.
- Home builder confidence in the single-family market increased in November, marking the third consecutive month of sentiment improvement, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose three points to 46 in November 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said builders are generally upbeat about the election outcome, and future sales expectations improved in November. The HMI survey also showed that 31% of builders reduced home prices in November, and the average price reduction fell slightly to 5% from 6% in October.
- Home improvement industry observers expect remodeling spending to rise in 2025 as more homeowners borrow against the rising equity they have in their homes, according to The Wall Street Journal. After a significant uptick during the pandemic, as people were stuck at home, remodeling spending has been lackluster. Higher interest rates also made it more expensive to finance major renovations. In September 2024, the Federal Reserve cut interest rates for the first time in four years. Rates are expected to continue dropping, which could prompt many homeowners to leverage the value locked in their homes and take out loans for improvements.
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