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
Mar 26, 2025 - Tariffs Prompt Home Builders to Beef Up Inventories
- Distributors may see a spike in demand as some customers stock up amid increasing trade strife. Some home builders are buying up extra lumber, fixtures, appliances, and other materials ahead of Trump administration tariffs, but the strategy could prove risky if high home prices keep buyers away, according to The Wall Street Journal. Some builders are pivoting to less expensive materials or reducing home sizes to offset the potential rise in materials costs brought on by tariffs. Industry observers suggest large home builders are better shielded from tariff-related uncertainty as their size gives them greater buying power to resist price hikes. However, smaller builders are more vulnerable. Building stockpiles of supplies presents risks for builders and distributors if demand dips and they are stuck holding unsold inventory. The National Association of Home Builders estimates that tariffs could increase the cost of building a single-family home by $7,500 to $10,000.
- Home builder confidence in the single-family market dropped in March 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), dropped three points to 39 in March from 42 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. While builders still face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages, the industry is encouraged by the Trump administration’s emphasis on reducing regulations.
- The Dodge Momentum Index (DMI) increased by 0.7% in February 2025 to 225.6 (2000=100), up from the revised January reading of 223.9. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component improved by 3.3%, but institutional declined by 4.6%. Dodge’s associate director of forecasting, Sarah Martin, said, “Planning momentum moderated in February, after a few months of stronger growth. Data centers continue to prop up growth in the overall index. Without them, the DMI would have decreased by 2% this month. Increased uncertainty around material prices and fiscal policies may begin to weigh on planning decisions, but for the time being, planning activity is largely continuing to move forward.”
- Demand for building design services declined in February over the prior month amid ongoing economic uncertainty, according to a March report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 45.5 in February from January’s reading of 45.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 47.8 in February compared to 51.4 in January, and the index for the value of new design contracts dropped to 42 from 46.2. The AIA’s Chief Economist, Kermit Baker said, "Conditions in the broader economy were generally positive in February, with the Consumer Price Index (CPI) increasing by only a modest amount, long-term interest rates easing from January levels, and healthy job growth. However, uncertainty surrounding the impact of recently announced tariffs may lead to a rise in building material prices in the coming months while immigration policy may put even more pressure on an already undersupplied construction labor market."
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