Hardware, Plumbing & HVAC Distributors NAICS 4237

Dec 22, 2025 - HVAC, Plumbing Spending to Rise

• US construction spending on HVAC and plumbing materials is expected to post solid annual growth in 2026, according to FMI's most recent Building Products Market Overview report. In 2026, spending on residential HVAC is forecast to increase by 4.4% over 2025 and nonresidential HVAC spending is projected to grow by 2.7% over the same period. HVAC spending is being driven in part by updates to energy efficiency codes for equipment, which will boost demands for new construction and retrofits. Wider adoption of high-efficiency heat pumps is also a tailwind for the HVAC industry. Spending on nonresidential plumbing materials is projected to increase by 2.7% in 2026; residential plumbing spending is expected to rise by 0.3%. High copper prices are accelerating the pivot to alternative plumbing product materials, including PVC and PEX, which have lower material and labor costs to install.
• Home builder confidence in the single-family market increased in December but remained solidly in negative territory as builders face ongoing headwinds, including high construction costs, tariffs, 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), rose one point to 39 in December 2025. Any HMI reading over 50 indicates that more builders see conditions as good than poor. Builder confidence readings remained below 50 for every month in 2025 and were in the high 30s in the fourth quarter. The HMI survey also showed that 40% of builders reduced home prices in December to lure potential buyers off the sidelines, and the average price reduction was 5%, down one percentage point from November.

• Rising construction project stress could hinder demand for hardware, plumbing, and HVAC distributors. More construction projects were paused, abandoned, or delayed in November, according to ConstructConnect’s latest Project Stress Index report. Overall, the index for stressed construction projects rose by 19.9% in November compared to October. Project abandonments jumped 41.1%, while projects on hold were up 16.5%, and bid delays increased 2.9%. In speaking to Construction Dive, ConstructConnect’s associate economist Devin Bell said, "Tariffs have played a key role in defining abandonment activity across both the public and private sectors this year. As companies deplete their pre-Liberation Day stockpiles months after initial tariffs took effect, rising construction costs are pushing some owners and developers toward project cancellations. This pressure is already visible in elevated private sector abandonments, and both sectors continue to run well above their historic averages."
• The Dodge Momentum Index (DMI) decreased 1.1% in November 2025 to 276.8 (2000=100), up from the revised October reading of 280.0. 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 declined by 0.1%, and institutional dropped by 3.4%. Dodge’s associate director of forecasting, Sarah Martin, said, "The influx of high-value data center work, compounded by inflationary cost pressures, continues to support elevated DMI levels. Overall, nonresidential construction is expected to strengthen in 2027, led primarily by data center and healthcare projects. Other nonresidential sectors are more likely to face softer demand and heightened macroeconomic risks."