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 (EMCO), Watsco, NOW Inc. (DistributionNOW), and HD Supply.
Industry Forecast
Hardware, Plumbing & HVAC Distributors Industry Growth
Recent Developments
May 24, 2024 - Improving but Flat Industry Growth
- The hardware, plumbing, and HVAC distribution industry is expected to see weaker sales growth this year, but demand is projected to improve in the following four years. The industry’s year-over-year sales increased by 15.1% in 2022 before dropping to 1.4% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate further to about 0.2% in 2024, then rise to 3.3% in 2025. The industry will then see steady but mostly flat average annual growth of about 4.1% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- A recent downturn in Home Depot’s sales could signal that a decade-long surge in home improvement spending is softening, according to The Wall Street Journal. In May, Home Depot reported first-quarter revenue of $37.26 billion, down 4.2% from the same period a year earlier. The home improvement giant also revised its full-year guidance downward to a sales decline between 2% and 5% from a February estimate of flat 2024 growth. Some industry observers suggest homeowners may have completed many of their home projects during the pandemic. Consumers may also be pulling back on their spending amid growing economic uncertainty and high interest rates and inflation. Remodeling activity is a demand driver for hardware, plumbing, and HVAC supplies.
- Demand for building design services improved in April over the prior month, but architectural billings remain soft, according to a May report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 48.3 in April from March’s reading of 43.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 54.8 in April compared to 54.9 in March, and the index for the value of new design contracts decreased from 50.0 to 49.2. The AIA’s Chief Economist, Kermit Baker said, “Continued high interest rates make it difficult for some projects to move forward, but there is ongoing interest in pursuing these projects once conditions improve. In the meantime, design activity is expected to remain sluggish.”
- A lack of affordability in the US housing market is prompting a building boom of for-rent homes, according to The Wall Street Journal. Amid high interest rates and home prices, many affluent potential home buyers are priced out of the single-family and townhome markets. In 2023, US builders completed 93,000 for-rent homes - the most ever in a single year and up 39% over 2022, according to John Burns Research and Consulting. There are another 99,000 for-rent homes currently under construction, but the breakneck pace of development is expected to slow as lending standards tighten. However, some industry watchers believe any lull in built-for-rent home demand will be brief as economic conditions make renting a better financial option than buying. As of March 2024, the average monthly mortgage payment was 38% higher than the average monthly apartment rent, according to CBRE.
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