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1 minute
Industry Insight Report: Fabrication Mfrs Q2-2025
Market Conditions: Slowing Demand Meets Tech Investment Surge
The fabrication and metal service center industry continues to navigate a period of mixed signals. While metals distribution has cooled over the last 18 months, demand for advanced fabrication equipment remains strong. Buyers are increasingly focused on automation, software integration, and material handling solutions to offset labor shortages and remain competitive in a tightening market.
Key Trends and Industry Developments
Equipment Innovation Still in Demand
Metal Center News’ 2025 Equipment Buyers’ Guide reveals that despite a slowdown in sales volume, investment in high-performance machinery is holding steady. Leading equipment brands across cutting (TRUMPF, Mazak, Hypertherm), coil processing (Red Bud, Fagor), and sawing (HYDMECH, Amada) are driving modernization. Fabricators and service centers are prioritizing efficiency and precision as part of long-term strategic planning.
Workforce Trends and Wages
Employment in the metal and mineral merchant wholesale space rose 8.0% year-over-year as of April, with three-year growth at 15.3%, well above the national private sector average. However, average hourly wages fell by 2.7% compared to the same time last year, reflecting a shift in workforce composition or a cooling in overtime and bonus pay. Over the past decade, wage growth in the sector has underperformed the broader economy, pointing to continued labor cost sensitivity in fabrication operations.
Tariff Activity Resurfaces
In policy news, the Metal Service Center Institute (MSCI) is urging industry stakeholders to consider requesting additional products for inclusion under Section 232 tariffs. This move could impact raw material sourcing costs and affect valuation for businesses reliant on imports or exposed to commodity volatility.
Outlook for Fabrication Businesses
The outlook through the remainder of 2025 is cautiously optimistic. Forecasts project a 3.0% compound annual growth rate for the metal service centers segment through 2029, slower than the broader economy, but stable. Fabricators that embrace automation and vertical integration while managing cost pressures are likely to outperform. Private equity interest in regional roll-ups also remains active, particularly in Texas and the Southeast.
Thinking About Selling Your Fabrication Business?
If you’re considering a sale in the next 12–36 months, now is the time to evaluate how your equipment, workforce, and customer mix stack up. Our free Sellability Score can help you assess your company’s market readiness.
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