U.S. Demand for Power and Hand Tools to Reach $11 Billion in 2014

by bkrigbaum@solagroup.com


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CLEVELAND – Nov. 5, 2010 — Demand for power and
hand tools in the United
States
will increase 4.1 percent annually to
$11 billion in 2014. Although difficult in the shorter term, the  U.S. housing market is expected to
recover by 2014, creating demand in the professional sector. In the meantime,
consumer demand will benefit from continued interest in DIY and home remodeling
activities. The expected recovery in manufacturing activity will also boost
gains, as will the ongoing introduction of new products — especially improved
cordless tools.

 

Preventing even more rapid gains
will be strong price competition in nearly every category of tools, coupled with
the durability of many hand, pneumatic and engine-driven products. In addition,
the expected price declines in the most advanced batteries for electric tools
will restrain value growth in the large electric tool segment. These and other
trends are presented in Power & Hand Tools, a new study from The Freedonia
Group, Inc., a Cleveland-based industry market research firm.

 

Maintaining established trends,
growth in demand for power tools will continue to outpace that for hand tools,
climbing 4.3 percent annually through 2014. Demand increases for power tools
traditionally outpace gains for hand tools as better-performing, more
competitively priced powered units replace hand tools.

 

In addition, product innovations
will continue to broaden the potential pool of power tool users, with more
powerful cordless tools attracting more professional demand. The hand tool
market, while rising a solid 3.8 percent per year, will be limited by the
inherently simple design of these products, which allows for only modest
innovation and pricing increases, as well as rising competition from cordless
power tools. In addition, many hand tools are designed to last decades,
dampening opportunities for replacement demand.

 

Through 2014, professional demand
will grow more rapidly than consumer demand as many of the leading professional
markets recover from sharp declines in 2008 and 2009. In addition, professional
users purchase the majority of power and hand tools in dollar terms. This
reflects the greater concentration of expensive power tools among professional
users, and their requirements for more durable, value-added hand tools.

 

Professional users also must
replace tools more frequently, although for some basic hand tools even
professionals can use a tool for more than a decade. Given the amount of use,
professionals are often willing to pay more for better quality tools. Consumers,
on the other hand, are more likely to shop by price, and rarely have need of
certain expensive tool systems like pneumatics and hydraulics.

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