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
Feb 21, 2025 - Housing Starts Weaken
- Single-family housing starts declined by 8.4% month-over-month and fell 1.8% year-over-year in January. The number of building permits issued for single-family, privately-owned housing units was flat month-over-month and dropped 3.4% compared to January 2024. Single-family housing completions were up 7.6% month-over-month and gained 9.8% year-over-year in January. Frigid January temperatures in much of the country slowed housing starts, according to reporting by Reuters. While a lack of existing homes on the market is helping to drive demand for new homes, some industry insiders are worried the Trump administration’s tariff-based trade agenda could increase builder costs at a time when high mortgage rates and home prices have reduced affordability.
- North American construction and engineering spending in 2025 is expected to grow by 2% after increasing an estimated 6% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. With growth of 19%, the data center sub-sector will lead 2025 nonresidential building construction, followed by public safety (9%), amusement and recreation (7%), and manufacturing (6%). Commercial construction spending is expected to decline 9% in 2025 amid a 6% drop in warehouse demand, which accounts for more than half of annual commercial spending. Lodging construction spending is forecast to fall 7%, and stubbornly high office vacancies are expected to hold new office construction to 2% growth in 2025. Amid high mortgage interest rates and a lack of affordability, single-family construction spending is forecast to rise by 4% in 2025. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 13% in 2025.
- Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase by 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements to be supported by rising home values, a steady labor market, and gradually improving existing home sales. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.
- After posting solid gains in 2023 and 2024, construction spending for nonresidential buildings is expected to slow significantly in 2025 and 2026, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction increased by 20% in 2023 and another 6% in 2024 but is forecast to slip to 2.2% in 2025 and 2.6% in 2026. For the next two years, growth will be led by data centers, which should support modest office construction in an otherwise challenging market. The warehouse sector is oversupplied, which will limit spending growth. Spending on institutional projects should remain stable as they are less susceptible to cyclical factors. AIA Chief Economist Kermit Baker said, “The modest outlook is partly based on a few expected headwinds to building activity, including potential tariffs on imports. There is also policy concern around how the construction labor force might be impacted by emerging immigration policy. Construction sector spending has been exceedingly strong – albeit unusually unbalanced – and coupled with these headwinds the projections are only very modest gains the next two years.”
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