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Water Heater Manufacturing in the US Industry Data and Analysis
Water heater manufacturers have faced a prolonged downturn since the pandemic-era peak of 2021, driven by weak housing activity and rising costs. Higher interest rates have weighed on residential construction and home sales since 2022, and mortgage rates have yet to return to pre-2022 levels. This has led to fewer new homes being built and fewer homes changing hands, which has held back demand for water heaters. The federal Energy Efficient Home Improvement Credit cushioned sales of energy-efficient models through 2025, but has since ended. This has encouraged fewer households to invest in nonessential water heater upgrades. Overall, revenue has been decreasing at a CAGR of 4.6% over the past five years and is expected to total $2.8 billion in 2026, with revenue set to drop 3.4%.
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What's included in this industry analysis
IBISWorld's research coverage on the Water Heater Manufacturing industry in the United States includes market sizing, forecasting, data and analysis from 2016-2031. The most recent publication was released October 2026.
About this industry
What's this industry report about?
The Water Heater Manufacturing industry in the United States operates under the NAICS industry code OD5684. This industry manufactures water heaters. These appliances heat water for uses such as bathing, laundry and cleaning. Products include storage tank models in small, medium and large capacities, as well as tankless units that heat water on demand. Most units are powered by natural gas or electricity. Related terms covered in the Water Heater Manufacturing industry in the United States include point-of-use tankless heater, hybrid or heat pump water heater and energy star.
What's included in this industry?
Products and services covered in Water Heater Manufacturing industry in the United States include Medium (31 to 49 gallons), Large (50 gallons or more) and Small (30 gallons or less).
What companies are included in this industry?
Companies covered in the Water Heater Manufacturing industry in the United States include A. O. Smith Corporation, Bradford White Corporation and Rheem Manufacturing Company.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Water Heater Manufacturing industry in the United States.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed product and service segmentation, analysis of major markets and international trade data for the for the Water Heater Manufacturing industry in the United States.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Water Heater Manufacturing industry in the United States.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Water Heater Manufacturing industry in the United States. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Water Heater Manufacturing industry in the United States. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Water Heater Manufacturing industry in the United States. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Water Heater Manufacturing industry in the United States. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Water Heater Manufacturing industry in the United States.
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Frequently Asked Questions
What is the market size of the Water Heater Manufacturing industry in the United States in 2026?
The market size of the Water Heater Manufacturing industry in the United States is $2.8bn in 2026.
How many businesses are there in the Water Heater Manufacturing industry in the United States in 2026?
There are 15 businesses in the Water Heater Manufacturing industry in the United States, which has declined at a CAGR of 0.0 % between 2021 and 2026.
How may import tariffs affect the Water Heater Manufacturing industry in the United States?
The Water Heater Manufacturing industry in the United States is likely to be significantly impacted by import tariffs with imports accounting for a high share of industry revenue.
How may export tariffs affect the Water Heater Manufacturing industry in the United States?
The Water Heater Manufacturing industry in the United States is likely to be impacted by export tariffs with exports accounting for a moderate share of industry revenue.
Has the Water Heater Manufacturing industry in the United States grown or declined over the past 5 years?
The market size of the Water Heater Manufacturing industry in the United States has been declining at a CAGR of 4.6 % between 2021 and 2026.
What is the forecast growth of the Water Heater Manufacturing industry in the United States over the next 5 years?
Over the next five years, the Water Heater Manufacturing industry in the United States is expected to grow.
What are the biggest companies in the Water Heater Manufacturing industry in the United States?
The biggest companies operating in the Water Heater Manufacturing industry in the United States are A. O. Smith Corporation, Bradford White Corporation and Rheem Manufacturing Company
What does the Water Heater Manufacturing industry in the United States include?
Manufacturing small water heaters and Manufacturing medium water heaters are part of the Water Heater Manufacturing industry in the United States.
Which companies have the highest market share in the Water Heater Manufacturing industry in the United States?
The company holding the most market share in the Water Heater Manufacturing industry in the United States is A. O. Smith Corporation.
How competitive is the Water Heater Manufacturing industry in the United States?
The level of competition is moderate and increasing in the Water Heater Manufacturing industry in the United States.
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