Power & Hand Tools (US industry forecasts for 2012 & 2017)

Abstract

Power and hand tool demand in the US is forecast to increase over three percent annually through 2012, approaching $14 billion. The US construction outlook is expected to recover by 2012, creating demand in the professional sector. In the meantime, consumer demand will benefit from continued interest in DIY and home remodeling activities. Ongoing introduction of new products -- especially improved cordless tools -- will create gains in all markets.

US production of power and hand tools has been adversely affected by competition from imports. Asian countries are leading suppliers of power and hand tools due to their labor cost advantages relative to the US. In particular, China has become the major source of US imports. US production of electric tools has been drastically reduced by outsourcing of production to lower-cost nations.

Maintaining established trends, power tool demand is forecast to outpace hand tool demand due to the continuing popularity of cordless electric products such as saws, sanders, polishers and grinders. Hand tool demand is limited by the inherent durability of these products. Unlike power tools, common household tools such as hammers frequently outlive their owners, dampening replacement demand. In addition, product innovation is less common than in power tools, limiting opportunities for value gains.

Cordless products will continue to post the best gains, benefitting not only from macroeconomic factors but from their performance advantages vis-a-vis plug-in models. The development of improved battery technology, such as lithium-ion chemistry, has encouraged both consumers and professionals to use cordless technology.

Growth in consumer tool demand will outpace the professional segment, benefitting from the ongoing popularity of do-it-yourself activities and the tradeup by consumers to feature-laden power tools. In addition, the US mortgage crisis will compel many homeowners to remain in their current homes rather than trading up to a larger or newer house, thereby boosting home remodeling and repair activity. Although growing more slowly than consumer demand, professional users will continue to account for the majority of overall tool demand through 2012. Professionals use a greater variety of tools, most of which are also more expensive than those used by consumers.

Study coverage

This new Freedonia industry study, Power & Hand Tools, presents historical demand data (1997, 2002 and 2007) and forecasts for 2012 and 2017 by tool product and market. The study also considers market environment factors, reviews foreign trade, details industry structure, evaluates company market share and profiles leading competitors.