Hardware, Plumbing & HVAC Distributors NAICS 4237

Oct 22, 2025 - Building Design Services Demand Remains Weak

• Demand for building design services fell in September from the prior month, according to an October report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) dropped to 43.3 compared to August’s reading of 47.2. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries dropped to 50.1 in September from 50.3 in August, and the index for the value of new design contracts decreased from 47.2 to 46.3. September marked the 19th consecutive month of decline for new design contracts. The AIA’s Chief Economist, Kermit Baker said, "Unfortunately, business conditions remain relatively weak at architecture firms. There was some erosion in project backlogs this past quarter, with the greatest slippage coming from firms with an institutional specialization." Architectural design activity drives future demand for hardware, plumbing, and HVAC equipment.
• Home builder confidence in the single-family market improved in October but remained solidly in negative territory, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose five points to 37 in October 2025 compared to September's reading of 32. Any HMI reading over 50 indicates that more builders see conditions as good than poor. October's HMI marked the highest reading since April 2025. Builders are cautiously optimistic as the average for a 30-year fixed-rate mortgage dropped to 6.3%, and the Federal Reserve is expected to ease interest rates further later in the year. However, the housing market remains challenging as many would-be buyers stay on the sidelines waiting for lower mortgage rates.

• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending will reach $524 billion, up 2.4% from Q1 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and economic uncertainty.
• Residential, commercial, and institutional construction segments face mixed prospects in 2025 and 2026, according to construction software and data firm ConstructConnect. Residential starts are expected to decline 7.7% in 2025, then rise 5.5% in 2026. Amid tariff uncertainty, tight credit, and persistently high inflation and interest rates, single-family starts are projected to fall by 6.9% in 2025, and multifamily starts will decline by 9.3%. In 2025, nonresidential building activity is forecast to increase 4.1%, led by large manufacturing projects, but as those projects wind down, manufacturing construction will drop about 40% in 2026. Institutional construction is expected to decline by 6.9% in 2025 as growth in the nursing home, public safety, and religious categories is offset by weakness in corrections and healthcare. Architectural firms will need to navigate volatile planning cycles, labor shortages, and shifting trade policy.