Distributors Still Optimistic About 2025 Growth in EW/VRP Equity Research Survey

Q1 2025 sales for electrical, utility and automation distributors who answered the Vertical Research Partners/Electrical Wholesaling quarterly survey on electrical market business conditions were up approximately +2.7%, on +0.4% volume growth and +2.3% on price growth.
VRP said the overall results were consistent with the average growth seen in 2024 and the 2024 Q4 exit rate, though the components of growth flipped sequentially with price picking up and volumes decelerating. The general pickup in pricing reflects some early tariff-related movements from OEMs, with another leg higher expected in Q2 2025 as the broader swath of tariffs take hold, according to respondents.

Growth in Q1 came in shy of the approximately +5% level distributors and VRP were anticipating in the 2024 Q4 survey in published in January. Some distributor contacts called out unfavorable weather in the quarter as a weight on volumes. The two-year growth stack expanded 30 basis points (bps) sequentially to +5.9%.
By category, electrical distributor sales were more robust than sales of utility and automation respondents in Q1 2025, up +5.8% on solid contributions from both price (+2.6%) and volume (+3.2% ). Utility T&D saw modest +1.9% growth driven by +2.8% of price growth. Automation sales were down -2.5% on soft volumes.

The VRP report said for electrical distributor respondents the two-year stack accelerated to +8.5% from the approximately +4.5% range in H2 2024. Results came in broadly in line with the orecast from distributors for approximately +6% growth. Electrical has the strongest Q2 2025 outlook among categories, expected up +6.7%.

“We continue to hear of robust data center activity, with distributors describing an almost universally robust demand environment despite the equity market gyrations,” said Nick Lipinski, VP and equity analyst for Vertical Research Partners (VRP). 

“Tariffs were naturally the key topic of discussion in our conversations with distributors. While a few saw activity start to stall intra-quarter or at the start of April, this type of commentary was not universal. Some believe strength seen toward the end of the quarter and the early part of April may have been related to inventory building ahead of tariff-related price increases. Beyond the potential to impact project economics, the administrative effort required to navigate the tax regime is clearly a source of angst. 

“While a degree of tariff implementation was expected following President Trump’s victory in the ’24 election, the scope of the response has been wider than anticipated, and a clunky rollout with several pauses and stutter steps has only added to the confusion and frustration.”

Here are anecdotal comments from distributor respondents to the Q1 2025 EW / Vertical Research Partners survey:

“Tariffs are a wild card. Some vendors have raised prices April 1, others are holding off.”

“Tariffs are having a short-term impact on pricing.”

“Decisions getting delayed pending what will be the outcome.”

“Lots of quotation activity but none of it generating sales.”

“Don’t see us changing forecast/budget in 2025, but if we have these tariffs still in November, 2026 gets murky.”

“Do think some manufacturers are facing push back on price… Lot of poker games going on.”

“Sounds like solar is probably going to take a hit because of political dynamics…Opportunity with LNG more than offsets it.”

“Had terrific Q1, price goes up and people order ahead…Through mid-April we’re booming, but it will slow.”

“Think we are taking some orders for inventory that’s not tied to market demand.”

“Long-term views generally optimistic despite short-term friction.”

“Haven’t seen or heard about major price increases yet…Five years ago, it felt like every other day there was a 10-20% increase out there.”