NAED Distributors Report Strong Second Quarter Growth

tED magazine’s exclusive Baird Electrical Distribution Survey shows better-than-expected revenue growth for the second quarter of 2026. The exclusive survey shows electrical distribution performed several percentage points better than overall distribution during the period.

Growth on the electrical side showed increases of 5.8% in April, 4.9% in May, and 10.1% in June when compared to the second quarter of 2025. On the Datacomm side, reported growth is 9.4% in April, 10.8% in May, and 11.8% in June. 23 distributors with a combined annual revenue of more than $10 billion took part in the survey.

Comments from respondents on current trends showed both signs of growth and signs of concern.

• ‘Data centers and their requirements on electrical products are driving the markets, as residential construction is horrible and commercial construction is heading in the wrong direction due to interest rates.”
• “Continued strength within industrial, especially with OEMs. Large construction projects holding steady with input up substantially.”
• “Large project activity increased, leading to better-than-expected revenue results. At the same time, we’ve been able to hold, and even slightly increase, margins.”
• “Demand is high, and supply chains still have disruptions they are working through. Shortage of labor exacerbates the problem.”
• “Projects closed over a year ago are finally starting to release.”

Pricing is also up compared to one year ago, with electrical increasing by 4.6% and Datacomm up 3.6%. Prices had remained relatively flat in Datacomm for several quarters prior to the second quarter of 2026, while electrical has seen an increase over several consecutive quarters, dating back to the third quarter of 2025.

Pricing has increased the most in the Midwest (+7.8%) and the least in the West (+2.6%). Respondents noted competition is intensifying and there are still uncertainties about raw materials and tariffs.

• “Raw material cost increases are helping with selling price increases.”
• “Pricing has increased due to the rise in copper and aluminum prices.”
• “Demand has proved to be stronger than anticipated, but with some pressure on margins that we addressed with modest price increases effective June 1^st.”
• “Gross margins are decreasing due to competition consolidation, but revenue is increasing.”
• “Jobs have been tougher to come by, much more competitive than normal; however, June was trending in the right direction. “
• “Demand is strong; pricing has taken a back seat to responsiveness and urgency.”

The outlook for the final two quarters of 2026 is trimmed slightly, with expectations for revenue in electrical to increase by 5.9% (previously 6.0%) and Datacomm by 8.7% (previously 9.9%). By geography, the Northeast and Midwest are expecting the strongest revenue increases, with each reporting an expected 7.5% increase.

Distribution as a whole is expecting to see a 5.8% increase in revenue over the second half of the year. Respondents to the exclusive tED magazine/Baird research continue to talk about their concerns over data centers, the upcoming midterm election, and international unrest.

• “Keeping fingers crossed for continued strength in data center construction. Seeing some headwinds starting to develop, however, with power grid issues and even some states advocating for more regulatory control of future construction.”
• “YoY sales growth has been steady, and margin is up above average; we have a healthy backlog indicating a continued growth trend.”
• “Data centers continue to drive upside volumes, though there is continued slow movement on BEAD;government-specific revenue has been negatively impacted by the Iranian conflict.”
• “Some concern about the amount of business manufacturers are taking direct to hyperscalers. Trends are still strong across the board.”
• “Data centers are taking manufacturing capacity on conduit/raceways, power distribution equipment and wire – starting to see lead times increase on ‘standard’ products in these areas.”
• “Much of the available product from many vendors is being sucked up by the big data center projects, creating a more difficult situation for smaller distributors – the big guys get first dibs and the smaller customers have to wait.”
• “There is too much uncertainty in the world right now – the mid-term elections, the wars in Iran and Ukraine, cost of material (copper, fiber), and vendor M&A all create a very uncertain future.”
• “Data center demand has impacted vendor lead times for several product categories. Transformers are a major issue.”
• “Costs are up sharply on raw materials, shipping and packaging, so there will be another distributor net price increase to start 3Q26.”
• “The economy needs more stability.”

Next week, tED magazine will have the responses on the most significant risks to business over the next 12 months, a supply chain outlook, and how data centers are impacting distributor business.