SOURCE: The Freedonia Group, Inc.

July 14, 2005 13:08 ET

World Power Tools Demand to Exceed US$29 Billion in 2009

CLEVELAND, OH -- (MARKET WIRE) -- July 14, 2005 -- World demand for power tools is projected to rise 5.0 percent per year (including price increases) through 2009 to over US$29 billion, with developing nations expected to register the strongest gains. This represents a substantial improvement over the 1999-2004 period, reflecting accelerating economic growth in developing regions and Eastern Europe. Improving economic fundamentals will bolster most power tool consuming sectors in these regions.

The largest national industries (in descending order of 2004 output) are those of the US, China, Japan and Germany. China, which more than quadrupled shipments from 1994 to 2004, has recently eclipsed both Germany and Japan, and will overtake the US after 2010. Gains in China have benefitted both from rising domestic demand and from export opportunities to the developed nations, in particular the US. The most promising opportunities are in Latin America, Africa/Mideast and the Asia/Pacific region, where growing populations and rising construction activity will boost demand. China will record among the strongest increases. India will also post strong gains, as the nation's fixed investment continues to rise. Latin America will benefit from economic recovery after the early 2000s recession. The Africa/Mideast region will benefit from improved fixed investment spending in key markets such as Turkey and South Africa.

Electric tools (plug-in and cordless) dominate world demand, comprising nearly three-fourths of power tool sales in 2004. Electric tools (most notably hand drills) will remain the leading type of power tool, due to their frequent use in both consumer and professional applications. Cordless electric tools are expected to show above average growth (8.7 percent annually), as consumers embrace cordless tools such as saws, drills and screwdrivers. The introduction of increasingly powerful battery products will spur gains across product categories. Professional users accounted for over two-thirds of the world power tool market in 2004, due to their use of a greater variety of more expensive tools compared to consumers. Gains in consumer tool demand will slightly outpace those of the professional market, due to the ongoing popularity of do-it-yourself activities in developed nations, and the rising standards of living in developing countries.

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