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Industry Insight Report: Fabrication Mfrs Q3-2025

Copper price volatility re-emerged as the dominant storyline for fabrication and metal service businesses in Q3 2025. President Trump’s tariff threat sent copper costs soaring, pushing buyers and distributors to accelerate purchases ahead of the August deadline. At Lion Business Advisors, we’ve seen increased buyer interest in fabrication businesses with strong inventory controls, modern equipment, and diversified customer bases—key differentiators in this uncertain environment.

Key Trends and Industry Developments

In July, the Trump administration announced a sweeping 50% tariff on copper imports, compounding existing tariffs on steel and aluminum. This move sent copper prices to record highs as fabricators and distributors rushed to bring in inventory before the new rules took effect. The scramble highlighted vulnerabilities in raw material sourcing and created significant risk for underinsured or under-secured businesses. Some local governments, such as Denver, responded by tightening scrap metal regulations to combat theft—underscoring just how valuable these materials have become. For owners thinking about a future exit, now is the time to examine inventory strategies, supply contracts, and risk mitigation policies. Well-prepared businesses will command higher valuations in today’s climate.

Employment and Wage Trends

Employment among metal and mineral merchant wholesalers—closely tied to fabrication—rose 4.5% year-over-year as of July, with three-year growth at 10.4%, well above the 3.7% average for all private employment. Despite this job growth, average wages fell sharply. Nonsupervisory hourly pay dropped 6.9% year-over-year, and is down 5.2% over the past three years. This suggests employers may be hiring less experienced workers or cutting incentive pay to manage margins. The wage data contrasts with inflationary pressures in other sectors and may signal margin compression risks. Buyers continue to scrutinize workforce quality and compensation models when evaluating fabrication businesses.

Industry Forecast

Vertical IQ projects a 3.0% compound annual growth rate (CAGR) for the U.S. metal service centers industry through 2029, slower than overall economic growth expectations. While demand for fabricated metals remains steady in sectors like energy, infrastructure, and defense, volatility in materials pricing and global trade policy adds pressure to long-term forecasting. No Texas-specific updates were reported this quarter.

Outlook for Fabrication Businesses

The current M&A climate for fabrication remains balanced, with strong buyer interest offset by increased diligence due to material cost fluctuations. We continue to see activity from strategic acquirers looking to control supply chains and reduce outsourcing, as well as private equity groups assembling regional platforms. Individual buyers are most interested in businesses with automation investments, clean books, and owner involvement that can be transitioned or replaced. Firms with strong inventory management, supplier relationships, and workforce stability are still commanding premium multiples, even in a cooling macro environment.

Despite headwinds, many fabrication businesses remain attractive acquisition targets. Owners considering a sale in the next 1–3 years should evaluate their readiness and de-risk where possible.

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. 

  • Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).