World Demand for Power Tools to Approach 29 Billion in 2013

Global demand for power tools is forecast to rise 3.7 percent per year through 2013, approaching $29 billion. Despite being presently mired in a recession, the bedrock U.S. market will provide the best opportunities, accounting for slightly over one-third of the additional demand generated between 2008 and 2013.

Recovery in U.S. demand will reflect a turnaround in the current housing crisis, as well as continued enthusiasm for do-it-yourself projects by U.S. consumers. U.S. power tool sales will also benefit from the introduction of improved products, especially cordless electric models. These and other trends are presented in World Power Tools, a new study from The Freedonia Group Inc., a Cleveland-based industry research firm.

The BRIC economies - Brazil, Russia, India and China - will all fare well. Demand in China and India will rise over six percent per annum, benefitting not only from continued gains in construction, but also from rising industrial production. Gains in Russia and Brazil will exceed the global average, benefitting from strong gains in improvement and repair construction activity; many of the buildings built in Russia during the USSR period (in particular, those built in the 1950s and 1960s) are currently in need of repair.

Production of power tools is expected to continue to shift to Asia, largely driven by Chinese manufacturing. China is projected to account for almost one third of global shipments in 2013, with a significant share exported to the U.S. Chinese production will also benefit from rising exports to the rest of the Asia/Pacific region. Outside of Asia, Eastern Europe is expected to post the strongest gains, due to both rising domestic demand and export opportunities to Western Europe.

Electric tools (plug-in and cordless) will continue to comprise the vast majority of sales, due to their frequent use in both consumer and professional applications. Cordless electric products will continue to post strong gains, benefitting not only from macroeconomic factors but from their performance advantages vis-a-vis plug-in models. The ongoing diffusion of improved battery technology, such as lithium-ion chemistry, will encourage both consumers and professionals to use cordless technology. Demand for pneumatic tools will benefit from continued gains in global industrial output. However, the inconvenience of these tools compared to electric models will continue to prevent acceptance in the consumer market.

WORLD POWER TOOL DEMAND
(million dollars)

Item	2003	2008	2013	2003-2008 Annual growth %	2008-2013 Annual growth %
Power Tool Demand	19960	24100	28900	3.8	3.7
North America	7800	8370	10200	1.4	4.0
Western Europe	6080	7460	8490	4.2	2.6
Asia/Pacific	3900	5170	6390	5.8	4.3
Other Regions	2180	3100	3820	7.3	4.3