Despite being presently mired in a recession, the U.S. market will provide the best opportunities for the power tool market, accounting for slightly over one third of the additional demand generated between 2008 and 2013, according to a study by the Freedonia Group. Inc.
Recovery in the U.S.demand will reflect a turnaround in the current housing crisis, as well as continued enthusiasm for do-it-yourself projects by consumers. U.S. power tool sales will also benefit from the introduction of improved products, especially cordless electric models.
The BRIC economies -- Brazil, Russia, India and China -- will all fare well. Demand in China and India will rise over 6% annually, 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.