NetPlus Alliance distributors are raising their expectations for 2026 after another quarter of strong purchasing growth, with 84% now expecting sales to increase at least 3% this year.

Purchases by NetPlus members from the group’s suppliers and wholesalers increased 20% in the second quarter from a year earlier, matching the 20% year over year increase recorded in the first quarter.

The results come from the latest NetPlus Industry Outlook, a quarterly survey of business conditions among industrial and contractor supply distributors. The latest survey included responses from 121 distributor members in July and covered second quarter results.

The purchasing increase does not mean distributor sales grew 20%. Sales results varied considerably across the network.

69% of respondents said their sales increased at least 3% during the first half of 2026. Within that group, 47% reported growth of at least 8%.

Another 21% said sales were essentially flat during the first two quarters, while 10% reported declining sales.

Distributor expectations for the rest of the year strengthened from the previous survey.

84% expect 2026 sales to increase at least 3%, up 7 percentage points from the previous quarterly survey. 45% expect growth of at least 8%.

Another 13% expect sales to remain even with 2025, while fewer than 4% anticipate a decline. Only one respondent expects sales to fall 8% or more.

The improving outlook comes as distributors report stronger business from existing customers and new sales opportunities heading into the second half.

Data center construction is emerging as one source of growth. Several NetPlus distributors said data center projects are generating business, while respondents also reported that construction projects previously delayed are beginning to move forward.

Those gains are being tempered by cost pressures. Multiple respondents cited rising oil and gas prices and their effect on product and freight costs as a challenge.

“In a quickly evolving industry and economic landscape, NetPlus Alliance members continue to focus on the fundamentals of relationship building, accountability, and collaborative growth,” NetPlus president and CEO Jennifer Murphy said.

The survey results provide a snapshot of conditions among independent industrial and contractor supply distributors at a time when broader indicators are showing continued, but uneven, industrial growth.

The Institute for Supply Management reported this week that U.S. manufacturing expanded for an eighth consecutive month in August, although growth in new orders, employment and order backlogs slowed. Manufacturers also continued to report high input costs and supply constraints.

Against that backdrop, NetPlus members are entering the second half with a more positive sales outlook. The percentage expecting at least 3% growth has increased since the previous survey, while fewer than one in 25 respondents expects sales to decline for the full year.

The 20% increase in purchases from NetPlus suppliers and wholesalers also suggests members are continuing to replenish inventory and source more products through the group’s supplier network as sales expand.

NetPlus Alliance represents 400 industrial and contractor supply distributors and works with more than 220 manufacturers. The organization negotiates pricing, rebates, and other terms on behalf of its distributor members.

For distributors, the survey points to continued sales opportunities in the second half, particularly from existing accounts, data center development and construction projects that are moving forward after delays. But higher product and freight costs could make converting that growth into stronger margins more difficult.

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Artificial intelligence infrastructure, warehouse automation and manufacturing reshoring are driving a new wave of U.S. industrial demand as companies seek more space for data centers, advanced manufacturing and highly automated distribution facilities.

Industrial net absorption across major U.S. markets exceeded 260 million square feet during the four quarters through the second quarter of 2026, surpassing the pre-pandemic annual range of 225 million to 250 million square feet, according to a Sept. 2 analysis from Morgan Stanley Real Assets published by Eaton Vance.

Industrial demand also accelerated from a year earlier. Trailing 12-month demand in the second quarter grew at twice the pace recorded in the second quarter of 2025, while the national industrial vacancy rate declined 10 basis points from a year earlier to 6.5%.

The stronger demand comes as construction of new industrial properties remains constrained. Construction activity has fallen 60% from its pandemic-era peak, while new development starts have averaged about 50 million square feet per quarter during the past three years.

Morgan Stanley Real Assets identified three forces behind the shift: the buildout of the data center supply chain, increased use of artificial intelligence and automation in warehouses, and expansion of advanced U.S. manufacturing.

Data center investment is already reshaping industrial demand in several markets.

Companies supporting data center construction and operations are leasing industrial space for semiconductor operations, equipment development, power technology, server testing, construction services and hardware storage.

In Dallas, data center-related companies have accounted for 30% of gross industrial leasing since the fourth quarter of 2024 and 40% of leasing for facilities larger than 700,000 square feet, according to Stream Realty data cited in the report.

Data center-related bulk industrial leasing in Dallas exceeded 7 million square feet during the past 12 months and accounted for nearly all the increase in leasing activity compared with pre-pandemic levels. Similar activity is occurring in Virginia and Midwest markets including Ohio and Kansas City.

The trend could have broader implications for distributors because the data center supply chain extends well beyond servers and computing equipment. Construction and operation of those facilities require electrical and power equipment, cooling systems, automation, construction products and other industrial supplies.

Warehouse automation is creating another source of demand.

Companies deploying artificial intelligence and next-generation automation are increasingly seeking large, modern distribution facilities capable of supporting autonomous mobile robots, conveyor systems, automated storage and retrieval systems and automated packaging equipment.

Leasing of U.S. industrial facilities larger than 1 million square feet reached 41 million square feet during the first half of 2026, twice the pace of the first half of 2025. Thirty-five leases exceeding 1 million square feet were signed during the period, compared with 18 a year earlier.

Ecommerce companies accounted for 50% of that large-building leasing volume. According to the report, the supply of modern facilities is tight, with only 12 bulk properties under construction and available for lease nationally. Some companies are now preleasing facilities scheduled for completion in 2027 and 2028.

Manufacturing expansion is adding another layer of industrial demand.

Advanced manufacturing now accounts for 19% of active U.S. industrial tenant requirements, according to JLL data cited in the report. The square footage associated with active manufacturing requirements has increased at a compound annual growth rate of more than 40% since 2020, with Texas, Georgia, Arizona and Ohio leading leasing activity.

Reshoring, increased logistics requirements and higher defense spending are contributing to the increase. The age of the country’s manufacturing infrastructure is another factor. More than half of U.S. manufacturing properties are between 30 and 60 years old, increasing demand for modern facilities capable of supporting advanced production.

Defense manufacturing is also contributing to growth in some markets. Aerospace and defense leasing in greater Los Angeles during the first half of 2026 was 30% higher than for all of 2025 and more than 140% above full-year 2024 levels, according to CBRE data cited in the report.

Taken together, the trends point to a changing mix of industrial demand. Traditional warehousing and logistics remain major users of industrial space, but data centers, advanced manufacturing, defense and highly automated distribution operations are accounting for a growing share of activity.

For distributors, the opportunity extends beyond construction of the facilities. Once operating, data centers, factories and automated distribution centers become continuing customers for electrical products, power and cooling equipment, automation and controls, material handling systems, safety equipment, fasteners, tools and maintenance, repair and operating supplies.

Morgan Stanley Real Assets said the U.S. industrial market appears to be moving from a cyclical recovery toward another growth cycle, with demand accelerating while development remains constrained. The firm expects AI infrastructure, automation and manufacturing reshoring to become increasingly important sources of industrial demand.

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Wholesale distributors reported steady growth across much of the United States in late May and June as reshoring, data center construction and defense spending offset higher freight costs, tariffs and supply chain disruptions, according to the Federal Reserve’s July Beige Book.

The report, released Wednesday and based on information collected through July 6, said economic activity expanded at a slight to moderate pace in 11 of the Federal Reserve’s 12 districts. Manufacturing activity also increased in most districts, supported by stronger demand from industrial, defense and technology markets.

Among the strongest reports came from the New York district, where the Federal Reserve said wholesale and distribution companies reported solid growth despite higher transportation costs and continued uncertainty surrounding tariffs. A shipping company cited strong import volumes across a broad range of products even as ocean freight rates climbed.

Manufacturers in the district also reported stronger orders and shipments, although longer supplier lead times prompted some companies to increase delivery estimates for products not already in inventory.

The report pointed out tariffs as an increasingly important factor in sourcing decisions.

In the Cleveland district, metal producers said customers shifted purchases from imported products to domestic suppliers as inventories of imported goods declined and tariffs increased the cost of sourcing overseas.

The Boston district cited growing demand for precision manufacturing tied to defense and industrial automation markets, while the Chicago district reported stronger sales of primary metals to defense contractors and data center construction projects.

Freight markets also continued to adjust to shifting trade patterns.

The Richmond district reported moderate growth in cargo volumes at regional ports as importers increased shipments from Asia and adjusted supply chains in response to tariff uncertainty. Contacts also said stricter regulatory enforcement has shifted freight toward licensed trucking companies, tightening available capacity.

In the Atlanta district, freight brokers reported year-over-year shipment growth for the first time since 2021. Demand was strongest from data center construction, machinery, aerospace and defense customers, while higher trucking costs prompted some shippers to move more freight by rail.

Conditions were less consistent elsewhere.

The St. Louis district described transportation activity as mixed. Some logistics companies said customers accelerated shipments ahead of potential tariff increases, while others reported canceled orders after tariff announcements disrupted sourcing plans.

The Dallas district reported stronger transportation and warehousing activity as service-sector demand accelerated.

Across nearly every district, rising costs remained the biggest challenge.

The national summary said businesses continued to report higher costs for transportation, energy and raw materials. Several districts said selling prices failed to keep pace with higher input costs, reducing profit margins.

In the Kansas City district, businesses said inflationary pressures continued to compress margins, leading companies to selectively raise prices while investing in technology and other efficiency improvements to offset higher operating costs.

Overall, the Beige Book suggests distributors entered the second half of 2026 with healthy demand across many industrial markets but continued pressure on profitability. Growth tied to reshoring, defense spending and data center construction helped support sales, while higher transportation, energy and sourcing costs continued to challenge distributors’ ability to protect margins.

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The U.S. trade deficit widened sharply in May as imports increased and exports declined, reversing much of April’s improvement and reflecting renewed strength in goods imports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported Tuesday that the U.S. goods and services trade deficit increased to $77.6 billion in May, up 42.2% from a revised $54.6 billion in April. Exports fell 3.2% to $317.7 billion, while imports rose 3.3% to $395.3 billion.

The increase was driven by a wider goods deficit, which grew $23.6 billion to $106.5 billion. The U.S. services surplus increased $0.6 billion to $28.9 billion.

Goods exports fell $11.3 billion to $210.6 billion, led by declines in industrial supplies and materials, capital goods, and consumer goods. Exports of non-monetary gold dropped $6.2 billion, while exports of computers fell $2.1 billion and computer accessories declined $2.0 billion. Crude oil exports partially offset those losses, increasing $2.0 billion.

Services exports rose $0.8 billion to $107.1 billion, driven by gains in travel, transportation, financial services, and other business services.

Goods imports increased $12.3 billion to $317.0 billion, led by higher shipments of consumer goods, industrial supplies, automotive products, and capital equipment. Consumer goods imports rose $3.5 billion, including a $1.9 billion increase in pharmaceutical preparations. Imports of industrial supplies and materials increased $3.1 billion, while automotive vehicles, parts and engines rose $2.2 billion. Capital goods imports increased $1.1 billion, reflecting higher imports of computer accessories and semiconductors.

Despite the monthly increase, the U.S. trade balance remained significantly improved from a year earlier. Through the first five months of 2026, the goods and services deficit were 40.6% lower than during the same period in 2025. Year-to-date exports increased 11.7%, while imports declined 2.1%.

On a three-month moving average basis, the trade deficit increased to $62.9 billion, as import growth continued to outpace exports.

Among major trading partners, the largest U.S. goods trade deficits in May were with Vietnam ($20.6 billion), Mexico ($20.1 billion), Taiwan ($19.4 billion), and China ($14.5 billion).

The deficit with Mexico widened $5.3 billion to $20.1 billion as exports to Mexico declined $1.5 billion and imports increased $3.9 billion. Trade with Switzerland shifted from a $4.4 billion surplus in April to a $2.3 billion deficit in May after U.S. exports to Switzerland fell $6.9 billion.

Adjusted for inflation, the real goods deficit increased 18.7% to $100.0 billion. Real goods exports declined 6.6%, while real goods imports increased 1.9%, indicating the widening deficit reflected changes in trade volumes rather than prices.

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Graybar and BradyPLUS are among 10 suppliers added to OMNIA Partners’ public-sector e-commerce marketplace, expanding the platform to more than 8 million products and giving distributors broader access to government, education, and nonprofit buyers.

The expansion, announced Tuesday, also includes SHI, Fisher Scientific, School Specialty, Insight Public Sector, Johnson-Lancaster & Associates, Vari, Mediatechnologies and E-Z-GO/Cushman. Together, the additions broaden the marketplace across 200 product categories, including electrical, industrial, information technology, laboratory supplies, foodservice equipment, facility maintenance, and workplace furnishings.

Suppliers will sell through OPUS, OMNIA Partners’ procurement platform, which allows government agencies, schools, higher education institutions, and nonprofit organizations to purchase products from multiple suppliers through a single online shopping cart using competitively bid cooperative purchasing contracts.

OMNIA Partners said 40,000 public-sector procurement professionals now use the platform, which launched in April 2024. The company said OPUS connects buyers with more than 650 suppliers and is designed to simplify purchasing by reducing the time required to identify suppliers, compare pricing, and verify contract compliance.

Along with the supplier expansion, OMNIA Partners introduced new platform capabilities, including enhanced search, streamlined access to supplier contracts, a centralized W-9 document library, integrated chat support, shareable product lists, and expanded purchasing approval tools.

This announcement highlights how digital procurement marketplaces are becoming a more important route to market for wholesale distributors. As public-sector buyers continue shifting purchasing online, distributors are increasingly competing on digital capabilities alongside product selection, pricing, and service.

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ProEnergy Supply LLC has launched an artificial intelligence-powered procurement platform designed to help independent wholesale distributors connect with emerging AI-driven purchasing systems.

The platform, called IVAN, integrates with distributors’ existing business systems and makes commercial information such as pricing agreements, inventory availability, credit terms, rebate programs, and manufacturer authorizations accessible to approved buyers and AI procurement tools, according to the company.

The launch reflects growing interest across the distribution industry in agentic AI, which enables software systems to perform tasks such as supplier selection, quote generation and purchasing with limited human intervention.

ProEnergy said IVAN allows distributors to control which customers and procurement systems can access proprietary commercial information while preserving existing customer relationships and branding.

According to the company, the platform uses a rules-based scoring engine to generate supplier recommendations and does not permit participants to pay for preferential placement.

ProEnergy also said more than $1 billion in distributor revenue is currently covered by letters of intent or binding agreements related to the platform. The company did not identify participating distributors or provide additional details regarding those agreements.

The company said it filed a provisional patent application covering the technology earlier this year and plans to commercially launch the platform in the fourth quarter of 2026.

IVAN is initially being marketed to distributors serving electrical, solar, plumbing, heating, ventilation and air conditioning, and related industrial markets.

The announcement comes as distributors, manufacturers and technology providers invest in AI-enabled procurement capabilities in anticipation of broader adoption of automated purchasing technologies across business-to-business commerce.

While the platform’s long-term market impact remains uncertain, the launch highlights the growing effort among distributors to ensure their pricing, inventory and customer-specific commercial data can be accessed by the next generation of AI-powered procurement systems.

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Specialty chemical distributor Palmer Holland has expanded into Mexico, establishing its first operations in Latin America as the company seeks to strengthen its presence across North America.

The Cleveland-based distributor has established a legal entity in Mexico and opened warehouse operations in Querétaro, creating a local platform to serve customers and suppliers throughout the country.

The move extends Palmer Holland’s footprint beyond the United States and Canada and positions the company to support manufacturers and industrial customers operating across all three countries covered by the United States-Mexico-Canada Agreement.

Company officials said the expansion includes a warehouse in Querétaro, locally based account managers and Spanish-speaking operational staff. The operation will support all industrial product categories currently represented by Palmer Holland, including coatings, adhesives, sealants, elastomers, lubricants, engineered materials, agriculture, and health and nutrition ingredients.

The company said the Mexican operation was built to provide local inventory management, logistics support and technical service while leveraging Palmer Holland’s broader North American supplier network.

The expansion comes as Mexico continues to attract manufacturing investment tied to nearshoring and supply chain diversification efforts. Industrial distributors, logistics providers, and manufacturers have increased investments in the country in recent years as customers seek to move production closer to North American end markets.

Tim Skufca, chief executive officer of Palmer Holland, said the company views Mexico as a natural extension of its North American growth strategy and expects the investment to improve service levels and supply chain continuity for customers operating in the region.

Palmer Holland said it has invested in the personnel, infrastructure and legal framework needed to support long-term operations in Mexico. The company also expects its presence to support local job creation and strengthen relationships with manufacturers and suppliers throughout the country.

Founded in 1925, Palmer Holland is an employee-owned distributor of specialty chemicals and ingredients. The company is headquartered in Cleveland and serves customers across the industrial, agriculture, health and nutrition, lubricants and engineered materials markets throughout the United States and Canada.

The expansion into Mexico marks the latest step in the company’s growth strategy and gives Palmer Holland a direct operating presence across the North American market.

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Imperial Dade Canada has completed its acquisition of Enterprise Paper Holdings Ltd., strengthening the distributor’s presence in Western Canada and adding operations across British Columbia and Alberta.

Terms of the transaction were not disclosed.

Enterprise Paper, founded in 1973, is a Canadian-owned distributor of paper, packaging and janitorial products serving customers throughout Western Canada. The company operates facilities in British Columbia and Alberta and has built a regional presence supplying businesses, institutions, and commercial customers.

The acquisition expands Imperial Dade Canada’s geographic coverage in Canada and adds Enterprise Paper’s established customer relationships, sales organization, and distribution capabilities to the company’s network.

Imperial Dade Canada said Enterprise Paper customers will continue to be served by existing teams while gaining access to a broader portfolio of products and expanded supply chain resources.

The deal is the latest in a series of acquisitions by Imperial Dade and reflects ongoing consolidation across the janitorial, sanitation, packaging, and facility maintenance distribution sectors. Distributors have increasingly turned to acquisitions to expand regional coverage, increase scale, and strengthen logistics networks as customers seek broader product offerings and more reliable supply chains.

Enterprise Paper has operated for more than five decades in Western Canada, building its business around paper products, packaging supplies, and janitorial solutions. The company has developed a reputation for customer service and local market expertise in British Columbia and Alberta.

Imperial Dade Canada distributes cleaning and facility care products, foodservice packaging, industrial supplies, and janitorial products throughout Canada. The company is part of Imperial Brady, a North American distributor serving customers across the facility maintenance, foodservice, packaging, and industrial markets.

The acquisition further extends Imperial Dade Canada’s reach in a region experiencing population growth, commercial development and increased demand for facility maintenance and packaging products.

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Salt Imports Corp. is expanding its pool salt sourcing and distribution operations as demand for saltwater swimming pools continues to increase across the United States.

The Phoenix-based distributor announced June 2 that it has increased product availability and expanded supply chain capacity to serve distributors, retailers, pool service companies, and commercial customers. The expansion comes as saltwater chlorination systems gain wider acceptance in both residential and commercial pool markets.

Saltwater systems use dissolved salt to generate chlorine within the pool, reducing the need for traditional chlorine products and lowering ongoing maintenance requirements. Industry estimates show saltwater systems account for a growing share of new in-ground pool installations as homeowners and commercial operators seek alternatives to conventional pool sanitation methods.

To support growing demand, Salt Imports has expanded sourcing operations in western Mexico, including production areas in Baja California Sur and Sonora. The company said the locations provide access to natural sea salt resources and transportation routes serving U.S. customers.

Founded in 2017, Salt Imports distributes food-grade, industrial and specialty salt products throughout North America. The company manages sourcing, transportation, customs compliance, and warehousing operations.

The expansion reflects broader growth in the pool industry, where builders and service providers continue to report strong interest in saltwater systems. As more pools adopt saltwater technology, demand for pool-grade salt is expected to rise through both new installations and ongoing maintenance requirements.

For distributors, the trend could create additional demand for consumable products tied to pool construction, maintenance, and water treatment. Reliable access to pool-grade salt may become increasingly important during peak swimming seasons as the installed base of saltwater pools continues to expand.

The pool salt initiative follows a separate expansion announced earlier this year by Salt Imports aimed at increasing the availability of food-grade sea salt products in the U.S. market.

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UPS is investing $50 million to expand logistics services for automotive and industrial manufacturers across North America, including the launch of new time-definite air freight service connecting Mexico with the United States and Canada.

The Atlanta-based logistics company said May 29 that the investment includes network enhancements, expanded cross-border capabilities and dedicated industry teams focused on automotive and industrial customers. The move comes as manufacturers face continued pressure from supply chain disruptions, changing trade policies and the need to move critical parts more quickly across North America.

Beginning in August, UPS will offer one-, two- and three-day heavy air freight service to and from Mexico through its North American Air Freight network. The service is designed for manufacturers moving high-value or time-sensitive shipments that support production operations.

Mexico has become an increasingly important manufacturing hub for automotive, industrial, and electrical equipment producers as companies continue to regionalize supply chains and expand nearshoring efforts. Many production networks require components to cross the U.S.-Mexico border multiple times before final assembly, making transportation reliability and customs efficiency increasingly important.

“Our automotive and industrial customers want an easy button for logistics,” Matt Guffey, UPS chief commercial, and strategy officer, said in a statement. “They need reliability, visibility and a partner that understands their supply chains end to end.”

UPS said the expanded air freight offering combines transportation, customs brokerage, and warehousing services within a single network. The company said the approach is intended to reduce border-related delays and provide greater shipment visibility throughout the transportation process.

The investment builds on broader efforts by UPS to strengthen services for manufacturers and industrial shippers. The company highlighted expanded less-than-truckload capabilities through UPS Ground with Freight Pricing, which serves shipments weighing more than 150 pounds, as well as broader next-day delivery coverage for U.S. businesses.

UPS also said it has increased automation across its network, with automated processes now operating in 67.5% of its facilities. The company continues to deploy radio frequency identification technology to improve shipment tracking and inventory visibility.

In addition, UPS has established a team of more than 300 specialists focused on serving automotive and industrial customers. The group is intended to provide industry expertise and support customers managing increasingly complex supply chains.

The investment reflects growing competition among logistics providers to capture manufacturing-related freight as production shifts closer to end markets and supply chains become more regionalized. For distributors and manufacturers, transportation providers are increasingly differentiating themselves through cross-border expertise, shipment visibility, and speed rather than price alone.

UPS reported revenue of $88.7 billion in 2025 and operates in more than 200 countries and territories.

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