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 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 28,900 industrial machinery distributors in the US sell parts, tools and machines produced by a variety of manufacturers. They serve as a source of machinery products to manufacturing and institutional customers that need these products 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 various manufacturers.

Joint Ventures Support Expansion

Large industrial machinery distributors are fueling their growth not only through increasing their product offerings but primarily through acquiring or joint venturing with small or regional companies.

Industry size & Structure

The average industrial machinery distributor generates $8-9 million in revenue and has about 14 employees.

    • About 22,500 firms in the industry operate 28,900 establishments, employ 311,000 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 over one 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
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              Apr 22, 2022 - Warehouse Space In Short Supply
                              • Competition from retailers and logistics companies for limited warehouse space is forcing distributors that operate primarily out of large warehouses to reexamine how they manage storage, handle distribution, and set up new delivery systems. The shortage of commercial warehouse space is the latest fallout from the pandemic-driven growth in online shopping and shows little sign of abating anytime soon. Supply chain disruptions are exacerbating the shortage as companies stockpile goods to hedge against supply chain challenges.
                              • US industrial production, an indicator of demand for the services of industrial machinery distributors, increased 5% year over year in March 2022, easing from a 7.5% jump in February. Output rose 4.9% for manufacturing, 7% for mining, and 7.5% for utilities. Overall, industrial output rose at an annual rate of 8.1% in the first quarter of 2022, according to the Federal Reserve.
                              • New orders for durable goods, an indicator of demand for industrial machinery, exceeded pre-pandemic levels in 2021 and were up 14.3% year over year in February 2022, according to the US Census Bureau.
                              • Employment in the industrial machinery distribution industry rose 2.3% year over year in February 2022, according to the US Bureau of Labor Statistics. Industry employment remains below pre-pandemic levels.
                              • Investment bank Goldman Sachs cut its gross domestic product (GDP) growth target to 4% for 2022, citing a more delayed recovery in consumer spending than previously expected. The firm had expected 4.4% growth in 2022. Goldman analysts pointed to a "longer lasting virus drag on virus-sensitive consumer services" as well as an expectation that semiconductor supply likely will not improve until the first half of 2022, delaying inventory restocking until next year. Analysts also expect spending on some services and non-durable goods to stay persistently below pre-pandemic trends, especially "if a shift to remote work results in some workers spending less overall."
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