Hand tool demand grows slightly

By By Damon Francis -- Purchasing, 12/8/2000

"U.S. demand for hand tools is projected to increase at an annual rate of 3.5% to $4.8 billion in 2003. Factors such as the cyclical slowing of the economy, particularly in the original equipment products sector, coupled with competition from power tools, long product life, and a limited potential for design innovation will restrain growth," reports the Freedonia Group, a Cleveland-based market research firm. The firm credits heightened do-it-yourself activity, the introduction of more specialized hand tools, and the necessity for certain hand tools in household and professional toolboxes for the continued modest growth.

Joe Spry, marketing manager for Sears Industrial Sales, Hoffman Estates, Ill., sees demand for hand tools as "fairly stable, neither up nor down." He says, "for 2001 there may be a 3%-4% increase because there's some pent-up demand. Jitters over technology stocks and corporate earnings caused some projects to be put on hold. Now that blue chips are rebounding, manufacturers will reinvest and those projects will proceed (such as new plants, retooling and other projects that require increased tool usage)."

According to Spry, "supplies are adequate and there's no problem meeting demand. There are no material shortages. Prices are stable, kept so by a competitive market. Some specialty products may increase about 2%. Fuel costs lead to freight cost increases in the 5% to 10% range."

Richard B. Wright, president of Wright Tool Co., Barberton, Ohio, says, "the demand for hand tools is steady and strong and running about 5% above last year. We expect it to do at least as well next year. Quality hand tools track the general economy and also heavy construction, both of which continue to be strong. The supplies are quite adequate relative to demand and there are no material shortages. Prices are inching up."

Trends among purchasers of hand tools

Spry notes five trends in particular:

1. Increasing interest in 'ergonomics'-anything relating to the tool user's safety, comfort, productivity, etc.,

2. Increasing preference for single sourcing to reduce vendor costs,

3. Increasing use of e-commerce, with the Internet becoming a primary purchasing method in many industries (e.g. the imminent Covisent for auto manufacturers and their tier-one suppliers),

4. Increasing expectations for value add (e.g. custom tool sets that give more product at a better price than buying individual tools), and

5. Increasing standards for tool organization, possibly related to ISO900 certification, including custom foam tool organizers and laser engraving that make it instantly obvious if tools are missing or misplaced.

Wright also noticed some trends among purchasers of hand tools. He says, "there are two trends of interest and they are related. First, is a substantial growth in the sale of torque wrenches. The second is an increased interest in higher-quality tools and less interest in the lower-grade tools. As more heat-treated and alloy fasteners are used, the strength of tools required to tighten and especially to remove these tools is increased. The trend toward stronger fasteners has been going on for many years, but this has a cumulative effect on the tools used for maintenance. The use of torque wrenches to tighten fasteners rather than relying on feel is a result of the general increase in the interest of improving quality. This will often result in fasteners being tighter than they would otherwise be, which increases the requirement for stronger wrenches."

Technological developments have given hand tools the ability to increase value-added features of many products. Technological advances have led to improvements, both ergonomic in nature and otherwise. The new Ridgid RT-3422 tapping tool, for instance, allows mechanical and plumbing contractors and water-utility operators to install branch lines while a line is still under pressure.