Why it matters to distributors: Growth continues but is becoming less predictable, with margin pressure intensifying as pricing competition, higher costs, and macro uncertainty weigh on performance.
Sales at plumbing, HVAC and industrial pipe, valves and fittings distributors increased in February, though at a more measured pace as economic conditions softened, according to the latest monthly report from the American Supply Association.
Median sales across all respondents rose 10.0% year over year in February and increased 4.5% from January. Year-to-date sales were up 4.9%, while trailing 12-month sales increased 7.4%. Inventory levels climbed 8.8% from a year earlier, and the median three-month average days sales outstanding edged up to 41 days, indicating slightly slower collections.
Results were more muted among industrial PVF distributors, where February sales rose 4.6% year over year. Year-to-date sales in that segment increased 4.0%, while trailing 12-month sales were up 9.9%.
The report reflects a distribution sector that continues to expand but is encountering growing headwinds tied to the broader economy.
Recent data show the U.S. entered 2026 with weaker momentum than previously estimated. Fourth-quarter 2025 real GDP growth was revised down to about 0.7% from an initial 1.4%, reflecting softer exports, consumer spending, government outlays, and business investment.
Housing, a key end market for many ASA members, remains subdued. Starts and permits have been flat and below prior-cycle highs, constrained by affordability challenges and sensitivity to interest rates. Mortgage rates dipped below 6% in February but have since moved higher amid geopolitical tensions following the late-February outbreak of war with Iran. The resulting increase in oil prices, which rose above $100 per barrel, has added to inflation concerns and pushed bond yields higher, reducing the likelihood of near-term monetary easing.
Despite these pressures, underlying demand remains positive, though uneven across regions and customer segments.
“Business is good,” one respondent said, while another reported that February had been tracking above budget until late-month snowstorms disrupted activity. Others cited fewer workdays and weather-related closures as limiting near-term sales.
Some distributors said they are gaining market share and building inventory in anticipation of stronger demand. At the same time, pricing pressure is intensifying.
“Sales activity was inconsistent across locations, but up overall compared to the same month last year and YTD,” one respondent said. “Competitive pricing pressures continue to put stress on margins or result in lost opportunities as several competitors continue to price well below our cost.”
ASA said the current environment points to continued growth, but at a slower and more selective pace. For distributors, that is likely to mean more volatile demand, delayed project timelines and sustained pressure on margins as borrowing costs and input prices remain elevated.
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