New York, NY (PRWEB) March 18, 2014
The Hand Tool and Cutlery Manufacturing industry has contracted at an annualized rate over the past five years, continuing its ongoing gradual decline for more than a decade. The industry manufactures a range of consumer and professional products, including tools, such as screwdrivers and saw blades; razors; cutlery; scissors; and cookware, such as pots and pans. Demand for the bulk of industry products depends on growth in the number of households and consumer spending, which was hampered by the subprime mortgage crisis as lending tightened, unemployment skyrocketed and disposable income declined. Over the past five years, the number of households has increased and consumer spending has rebounded, but domestic demand for industry products has been increasingly satisfied by imports.
Industry participants have been losing market share to imports, which have grown at an annualized rate over the past five years to satisfy a large proportion of domestic demand in 2014. The relative stability of the manufacturing technologies required to make low-value, high-volume products has made it easy for producers in developing economies to exploit operational efficiencies achieved through lower labor costs and reduced regulatory oversights. According to IBISWorld Industry Analyst Leah Goddard, "such efficiencies allow for the production of tools and cutlery that out compete many industry goods on the basis of price." Due to heightened import competition in 2014, which is occurring partly because of the dollar's appreciation, "industry revenue is expected to slightly fall this year," says Goddard.
IBISWorld estimates that the combined market share of the top four companies operating in the Hand Tool and Cutlery Manufacturing industry is slightly larger than the market share concentration five years ago. Due to heightened import competition, the industry has continued a trend of consolidation. Larger manufacturers are acquiring smaller companies to expand their market share. Moreover, industry operators are reducing the size of their staff to cut costs. For these reasons, the average industry profit margin has risen over the period, up from 2009. The industry's future revenue outlook is also more favorable, since rising disposable income will increase consumer spending on home goods as well as services provided by other industry customers, such as mechanics, chefs and hairdressers. Consequently, industry revenue is forecast to remain stable in the five years to 2019. As imports continue to restrict growth, production in these countries will also capture demand from the middle class in newly industrialized nations, limiting exports as a source of revenue.
For more information, visit IBISWorld’s Hand Tool & Cutlery Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Hand Tool & Cutlery Manufacturing industry primarily manufactures hand tools, edge tools and metal blades (e.g. screwdrivers, scrapers, bits and saw blades). The industry also manufactures metal kitchen cookware, utensils and cutlery (excluding products made by casting or stamping, without further fabrication).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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