Demand for power and hand tools in the US is forecast to expand 4.8 percent per year to $13.1 billion in 2016, a turnaround from declines recorded during the 2006-2011 period. Growth will benefit in large part from recovering construction activity, specifically an expected rebound in housing starts. The continued popularity of DIY and home remodeling activities among consumers will provide additional sales opportunities, and an improved US manufacturing environment will also support gains. However, intense price competition in nearly every category of tools will serve to restrain advances in market value. The durability of many engine-driven, hand, and pneumatic tools will also limit overall sales gains. These and other trends, including market share and product segmentation, are presented in Power & Hand Tools, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Demand gains for power tools will outperform those for hand tools, as power tools -- especially cordless electric tools -- benefit from greater capacity for innovation. For instance, battery technology improvements have made cordless electric tools more powerful, which has increased their usage -- especially in the professional market. Additionally, lithium-ion batteries are becoming increasingly prominent in cordless tools, as they offer a lighter weight and longer run time than the nickel-based batteries they replace. Advances in the hand tool market are ultimately limited by their inherently simple design, which allows for only modest improvements and pricing increases. In addition, many hand tools are designed to last decades, restraining opportunities for replacement sales.
The professional market comprised the majority of power and hand tool demand in 2011, which reflects the greater concentration of expensive power tools in the professional market. In addition, professionals tend to use tools on a daily basis and, as a result, must replace tools more frequently (although professionals can use some basic hand tools for more than a decade). Professionals are often willing to pay more for higher quality tools, since the initial investment will pay off over the long run through better performance and longer tool life. In contrast, consumers are more likely to purchase tools based on price, and rarely require more expensive hydraulic and pneumatic tools. Consumer demand is tied to individual participation in DIY home maintenance and repair, various hobbies, and other diverse factors. Professional demand growth will outpace consumer gains through 2016, due to a rebound in housing starts and increases in manufacturing output.
The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.
