Power & Hand Tool Demand to Exceed $14 Billion by 2011
CLEVELAND, OH - Power and hand tool demand in the U.S. is projected to rise 3.1 percent annually through 2011, reaching $14.3 billion. Advances will result from product innovations, especially the development of higher-voltage lightweight cordless electric tools. In addition, gains will result from continued interest in DIY and hobby activities in the consumer market, especially among women. The development of new consumer-friendly battery powered tools, such as wrenches and clamps, will spur gains. Rising nonresidential building and nonbuilding expenditures will also create opportunities. However, weak residential construction activity (including an outright decline in new housing starts) will limit gains. A flat outlook for construction and manufacturing employment will also dampen growth. Despite rising demand, production of power and hand tools in the U.S. will remain flat, as producers expand offshore production in lower cost nations such as China. These and other trends are presented in “Power & Hand Tools,” a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.
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, will encourage both consumers and professionals to use cordless technology.
Professional users accounted for over two-thirds of overall tool demand in 2006. Professionals use a greater variety of tools, most of which are also more expensive than those used by consumers. However, growth in consumer tool demand will outpace the professional segment, benefitting from the ongoing popularity of do-it-yourself activities and the trade-up by consumers to feature-laden power tools.
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