Distributors Forecast Solid H2 2025 Growth in EW/Vertical Research Partners Survey
The latest EW/Vertical Research Partners quarterly survey on electrical market business conditions points to a robust market climate in 2025. With the election over and the Federal Reserve open to lowering interest rates a few notches in 2025, survey respondents were quite optimistic and forecast potential growth in Q1 2025 of +5.1%. This growth comes on the heels of a solid rebound in Q4 2024 of +3.1% growth after a lackluster previous quarter, when respondents saw growth in 3Q 2024 slow to 0.9%. Nick Lipinski, a VRP equity analyst said this was the highest forecast since Q1 2023.
“Most respondents pointed to a stronger than expected finish to 2024, which supports the general expectation for sales to accelerate sequentially through 2025,” said Lipinski. “Projects that have been held up in the pipeline on political or interest rate uncertainty are beginning to uncork. The timing of a clear inflection point is debatable but it sounds like expectations for H2 are broadly robust. We expect to see a measured pace of improvement in underlying activity though as we noted in our recent 2025 outlook piece, there may be some fits and starts as the animal spirits are unleashed.”
Many of the verbatim comments in the survey illustrate the level of optimism amongst distributor execs. One respondent expected H2 2025 and 2026 to be “as good as it could be,” and another said
+6% to +9% growth “seems to be the norm.”
“Eight 8 months ago it was 75% red lights and after the election it was 50% green/50% yellow," said one respondent. “To get to 80% green we need a point and a half rate reduction. Two cuts in H1 would give us all green lights.”
2025: All Systems Go?
•”Now that the election is over and we are seeing interest rates moving lower we are seeing significant movement in purchasing from customers.”
• “With price increases that customers have grown to understand as inevitable, we will see moderate price inflation along with higher inventory levels to support demand."
• “Expect relatively flat pricing in 2025.”
• “Mega projects somewhat limiting activity by crowding out product demand.”
• "Optimism building… Feeling more positive every day."
• "Data center world is booming…Can't even get on production schedules because Meta and those guys are hogging up all the slots."
• "Everything looks great. Truly expect things will go boom pretty quickly, just waiting on the releases."
• Potential to see some advanced buying ahead of tariffs, depending when they get announced Kind of have to wait and see."
