Industrial Machinery 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 20,100 Industrial machinery distributors in the US sell parts, tools, and machines produced by various manufacturers. They serve as a source of machinery products to manufacturing and institutional customers who need them for their own operations. Customers include industrial manufacturers, food processors, government entities, and energy companies.
Forward Integration By Manufacturers
Industrial machinery distributors typically carry a broad range of products from a variety of manufacturers.
Joint Ventures Support Expansion
Beyond increasing product offerings, large industrial machinery distributors are fueling growth primarily through acquiring or entering into joint ventures with small or regional companies.
Industry size & Structure
The average industrial machinery distributor generates $9-10 million in revenue and has about 17 employees.
- About 20,100 firms in the industry operate 27,200 establishments, employ 340,000 workers and generate $192 billion in annual revenue.
- 83% of firms have less than 20 employees.
- They must invest heavily in real estate to house inventory and may have facilities from 1,400 square feet to 1.5 million square feet for the largest distributors.
- The largest firms in the industry include Grainger, Veritiv, MSC Industrial Supply Company, Pentair, and Sumitomo Corporation.
Industry Forecast
Industrial Machinery Distributors Industry Growth
Recent Developments
Oct 30, 2024 - Inventories Rising Amid Falling Sales
- Total sales for machinery and equipment wholesalers fell by 9.3% in June compared to a year ago and were down 6.9% versus May, according to Census Bureau data. Meanwhile, industry inventories shot up 13% year over year in June to a record level. Producer prices for machinery and supply wholesalers dipped 0.6% in July compared to a year ago after rising by 6.1% in the previous July-versus-July annual comparison, according to the latest US Bureau of Labor Statistics data. Employment at industrial machinery distributors grew 0.3% year over year in July to reach a new high for the industry, while the average industry wage fell 3.3% over the same period to $34.92 per hour, BLS data show.
- The National Association of Wholesaler-Distributors (NAW) in October filed an amicus brief with a US appeals court challenging the EPA’s Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3 rule. The EPA rule mandates stringent emissions reductions, which NAW argues effectively requires a rapid and costly transition to electric heavy-duty vehicles (HDVs). The trade association asserts the rule would have a severe economic impact of wholesale distributors and the broader supply chain as HDVs are a critical part of distributors’ fleets. “The exorbitant costs of acquiring and operating electric trucks, combined with their reduced payload capacities and longer charging times, will ripple through the entire supply chain,” and saddle the industry with crippling costs, according to a NAW press release. The organization filed the brief in support of the 24 Republican state attorneys general who are challenging the EPA rule. Oral arguments in the case have not yet been scheduled.
- Campaign promises to strengthen the languishing US manufacturing sector, if realized, would help boost domestic demand for industrial machinery. As part of her “America Forward” agenda, VP Kamala Harris has outlined $100 billion in new investments in manufacturing, offering tax credits to boost investment and create industrial jobs, investments in AI, science, and energy development, and supporting American-made products. Former President Trump has proposed instituting a four-year plan to boost domestic manufacturing so that the US doesn’t need to rely on China for crucial goods. He has promised big corporate tax cuts for manufacturing and protectionist across-the-board tariffs. In September, Trump threatened to slap farm and construction equipment manufacturer John Deere with a 200% tariff if it moved some production from Iowa to Mexico as planned. The Fed’s rate cut in September and the signal of more to come by year’s end will benefit the US industrial sector.
- Distributors of industrial machinery considering electrifying their fleets will want to take note of a new analysis from Ryder showing that operating expenses of low-emissions rigs are far higher than those for diesel trucks, The Wall Street Journal reports. The truck leasing company found that as trucks get heavier, the difference in operating costs between battery-electric vehicles and diesel trucks grows more pronounced, with annual costs of operating battery-electric big rigs about twice as expensive as diesel trucks, per Ryder’s analysis. Because battery-electric trucks are heavier than diesel trucks and require several hours to recharge, companies need more vehicles and drivers to haul the same volume of freight as a diesel truck. The Ryder analysis estimated that a company would need nearly two battery-electric big rigs and more than two drivers to equal the output of a single heavy-duty diesel truck, WSJ reports.
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