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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 10,100 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 27 workers, and generates $17.5 million annually.

    • The hardware, plumbing, and HVAC/R distributor industry consists of 10,100 companies, employs 277,400 workers, and generates about $178 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 (EMCO), Watsco, DistributionNOW, and HD Supply.
                              Industry Forecast
                              Hardware, Plumbing & HVAC Distributors Industry Growth
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              May 16, 2022 - China’s Zero-COVID Policy Slows Factory Output, Exports
                              • Distributors that rely on product imports from China may be experiencing increased supply chain disruptions. China’s manufacturing output decreased to a 26-month low in April as its zero-tolerance approach to the pandemic slowed factory output. The Caixin China General Manufacturing purchasing managers’ index (PMI) dropped from 48.4 in March 2022 to 46 in April. A reading below 50 suggests output is contracting rather than expanding. In April, new orders and production fell to their lowest levels since the survey began in 2004, and exports declined at the steepest rate in nearly two years. Delivery times grew at the second-fastest rate in the index’s history amid travel restrictions and raw materials shortages.
                              • Residential demand for new HVAC systems is expected to flatten in 2022. However, that should be offset by growth in commercial demand, according to Tim Fisher, team leader of market intelligence at Heating Air-Conditioning and Refrigeration Distributors International (HARDI), a trade organization for HVACR wholesalers. The exact market scenarios will vary from region to region, he added. Inflation, parts and equipment shortages caused by global supply-chain problems, and a shortage of qualified workers in HVAC will continue to be pain points during the year. “On a dollar basis, we’re absolutely anticipating continued top-line growth. The issue here, though, will be inflated costs and slowing demand,” Fisher said.
                              • Demand for HVACR equipment will likely increase as architecture firms get more requests to upgrade HVAC systems in commercial buildings. High-density filtration is a common request from office building owners, as are ion technology and UV lighting in HVAC systems. Landlords are asking for Minimum Efficiency Reporting Values air filters rated between 11 to 13. The higher the number, the greater the ability for filters to capture small particles. Ion technology in HVACR systems uses an ion rod that spins in the ductwork. The rod ionizes the molecules in the air and neutralizes viruses and bacteria. Much of the work on HVACR equipment is being done when building leases turn, which happens every 5, 7, or 10 years, depending on the contract.
                              • HVAC distributors may benefit from the increasing use of heavy-duty filters to block microbes and install systems that use ultraviolet light or electrically charged particles in the ductwork to kill the virus. Many of the methods to reduce pathogens have been around for years but were geared more to hospitals than commercial buildings. What we’ve learned is that our previous standards of air purification didn’t hold up to the test of the pandemic and those need to evolve accordingly, George Oliver of Johnson Controls said.
                              • Total construction spending increased 0.1% in value month over month on an adjusted basis and 11.8% in value year over year on an unadjusted basis in March 2022, according to the US Census Bureau. Residential construction spending increased 1% month over month and 17.8% year over year in March. Nonresidential construction spending declined 0.8% month over month and increased 5.8% year over year in March.
                              Get A Demo

                              Vertical IQ’s Industry Intelligence Platform

                              See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                              Build valuable, lasting relationships by having smarter conversations -
                              check out Vertical IQ today.

                              Request A Demo