ST. LOUIS — In the exclusive tED magazine/Baird research for the 2025’s third-quarter, NAED distributors point to indications of “healthy mid-single digit” growth for next year.
18 distributor companies representing more than $7 billion in annual sales responded to the third quarter survey, which showed revenue growth in the third quarter and a rise in pricing trends.
Respondents say they expect to see a 5.4% growth rate in electrical next year, along with a 4.5% growth rate in Datacomm. Those forecasts are generally in line with the broader distribution industry, which anticipates a 4.7% growth rate next year.
Distributors say they expect positive pricing and an increase in the volume of work to push toward positive results. Within the electrical sector, the South appears to have the strongest forecast, with the Midwest coming in with the weakest.
Comments from respondents vary from strong expectations to concerns about backlog.
- “Electric utility demand has slowed down for us for the second half of 2025 and demand looks tepid in early 2026.”
- “We are projecting 3Q2025 to be up mid single-digits year over year. For 2026, we are also mid single-digit growth, with the second half stronger than the first half. Pricing may provide a small lift to revenue in 2026.”
- “We’ve got good backlog going into 4Q. But in terms of the visibility for 4Q and beyond, right now it looks pretty cloudy. We’ll be relying on backlog in 4Q and suspect that book to bill goes negative in 4Q.”
- “Prices are increasing and demand is soft. Not a great combination.”
- “We’ve absorbed small tariff increases, but needed to increase prices to some of our core product categories. The market is handling the increases so far. We should have better visibility into the market’s price sensitivity in 1Q of 2026.”
When asked about the top three risks for concern into 2026, 27% say a recession, followed by 23% saying passing tariff or price increases along to customers, and 17% expressing concern over competitive behavior.
Next week, tED magazine will provide the results on AI use and how it will be integrated into pricing and strategies. You can also read about the exclusive Baird/tED magazine research in the December digital-only issue of tED magazine.