Demand for Cutlery and Hand Tools Collapsed in 2007

Demand for cutlery and hand tools collapsed in 2007, another casualty of the housing market crash. In 2010 and 2011, however, the industry was able to post revenue gains thanks to rising consumer spending and export demand. The industry has a tough battle ahead. Rising consumer spending will be met with rising import penetration, limiting industry growth. Demand for products from the Hand Tool and Cutlery Manufacturing industry collapsed during the housing market crash of 2007. The number of new houses being built and the number of existing homes being sold tumbled along with house prices. This decline reduced demand for hand tools from the construction and do-it-yourself segment. As the recession hurt consumers, the rate of new household formation slowed and demand for cutlery and household hand tool products followed. After the recession, the US economic recovery has failed to gain steam along with continued weakness in construction markets. "Rising consumer spending and export demand, however, allowed revenue in the Hand Tool and Cutlery Manufacturing industry to post substantial gains in 2010 and 2011," IBISWorld industry analyst Brian Bueno said. Over 2012, revenue is projected to increase 4.3% to $12.8 billion, capping annualized growth of 1.5% since 2007. Over 2012, new home construction is projected to experience some recovery. Over the five years to 2017, the industry is expected to continue its decline despite some growth at the beginning of the five-year period. As the economy picks up, US housing starts are projected to increase strongly, along with a rise in income and consumer sentiment. However, imports will limit industry growth and ultimately push back into a downward trend, Bueno said. The low level of industry concentration indicates that revenue generated by firms operating in this industry is spread across a relatively large number of industry participants. The vast majority of industry firms are small enterprises, most with less than 20 employees. The Procter & Gamble Company, Stanley Black & Decker and Snap-On Inc. are the largest companies in this industry. Source: sfgate.com