Ferguson CEO Kevin Murphy on domestic manufacturing and tailwinds for the HVAC and plumbing giant

Business Overview & Growth Drivers - Ferguson's business is largely unaffected by the government shutdown due to its focus on private capital construction projects like data centers, pharmaceutical production, and chip manufacturing [3] - The company is experiencing a renaissance in US production, driven by large projects, data center activity, onshoring/reshoring trends, and a desire to bring supply chains closer to the US [5][6] - Ferguson sees continued acceleration in data center construction, with growing open order volumes and bidding activity [15][16] - Large capital construction projects (>$400 million) are driving growth for Ferguson [17] Macroeconomic Factors - Rate cuts could positively impact both residential and non-residential construction, particularly hospitality and multifamily construction [8] - A reduction in 30-year mortgage rates is desired to improve housing affordability and stimulate remodel activity, with a target of sub-6% mortgage rates to trigger increased activity [9][11] - The US has a housing deficit of 3 to 5 million units, requiring increased construction to improve affordability [10] Challenges & Opportunities - A worker shortage in the trades is a concern, and Ferguson is actively involved in encouraging and developing the trades through its "Ferguson Cares" philanthropic program [19][20][22] - Ferguson aims to improve the productivity of trade professionals to mitigate the impact of the worker shortage [12][13][22] M&A Strategy - Ferguson, a $30 billion revenue company in a $340 billion market, competes with roughly 10,000 small to medium-sized businesses [23] - The company pursues acquisitions to consolidate the industry and provide succession plans for independent owners, aiming for 1-3% annual revenue growth through this strategy [23][24]