EW/VRP Distributor Business Conditions Survey Points to a Solid Start in 2026

The quarterly Electrical Wholesaling/Vertical Research Partners (VRP) business conditions survey for 1Q 2026 did not uncover any major impact of the war in Iran on respondents’ businesses.

For example, distributors reported sales up +4.1% overall in Q1 2026, similar to the +4% exit rate from Q4 2025, with roughly equivalent contributions from price and volume. The two-year stack was also in line with Q4 and 2025 overall at  approximately +7%. Low Voltage Electrical and Automation results were up solidly (approximately +5.5%) with growth in both volumes and pricing.

Utility results were up +1.7% driven by price, close to the +1.2% growth distributors had predicted in last quarter’s survey. Automation and Electrical results were also close to the expectations noted in Q4. Some distributors pointed to weather-related disruptions (i.e. blizzards) to productivity and selling days but this was not enough to derail the quarter.

No tangible signs of disruption yet

Nick Lipinski, VP and an equity analyst with Vertical Research Partners, said that for now distributors appear to be relatively insulated from the ongoing conflicts in the Middle East. “Higher oil prices are impacting shipping costs and presenting some operational pressure points but there were no meaningful signs of demand disruption,” he said. “Some distributors expressed caution that if the conflict lingers on, H2 activity could start to stall. OEMs are actively pushing price (sometimes beyond or in addition to the normal cadence) with the usual rates of realization.

“We pressed distributors on possible signs of pre-buying activity and it did not sound like there was meaningful, if any, pull forward in demand in the quarter. Right now there are no discernible expectations of limited product/component availability outside of normal supply chain dynamics. Growth for Q2 is projected at a solid 4.2% overall, with all categories expected to see growth led by Automation (+7.2%).”

According to the 1Q 2026 report, data centers remain the driving force behind distributor sales growth, though the pulse in other verticals is largely solid with the exceptions of residential and office construction. Said Lipinski, “On the data center front, the push by larger operators for power self-sufficiency is driving additional on-site work beyond the in-plant demand pull.

Healthcare activity remains solid, and one distributor noted a healthy construction pipeline for senior living/medical communities. This is somewhat perversely offsetting softness in new residential construction, though multi-family is hanging in.”

He also said public construction spending is steady with strength in water, airports and convention centers. “We picked up on good demand across wood products, metals and auto/tire in the Southeast,” Lipinski said in the report. “Midwest machine builders are showing continued improvement after gaining some momentum in H2 2025.

We would note that our polling methodologies of end markets can result in real-time sentiment (i.e. current month’s pulse), versus what actually occurred in the quarter and view these reads as more directional indicators of activity.