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The global power tools market size was USD 25.48 billion in 2019 and is estimated to reach USD 31.28 billion by 2027, exhibiting a CAGR of 3.1% during the forecasted period.
The market is expected to grow significantly in the coming years owing to the adoption of cordless equipment to increase operating hours. However, factors such as high costs and maintenance of moving parts and fluctuations in prices of raw materials are hampering the growth of the market. In order to overcome these challenges, tool manufacturers are working on developing products that require low maintenance and can provide multi-purpose operations at lower prices. For example, in March 2020, Robert Bosch Tool Corporation has launched a product named “Chameleon”, which is a cordless power tool. It is a 5-in-1 drill/driver system integrated with CORE18V battery.
Emergence of COVID 19 to Affect Product Value Chain
The immediate shutdowns of the factories, disruption in transportation, less availability of raw materials, etc. have created abrupt disruptions in the manufacturing of power-driven tools. As a result, there are growing worries that the market analysis for industrial components will observe a downturn in 2020. The major manufacturing hubs of these tools such as China, US, India, Germany, Italy, Japan, and South Korea are facing challenges in the supply chain and production processes. This is mainly due to the less number of workers and suppliers available to transmit the value chain process throughout assembly line.
In addition to this, the raw material prices are experiencing high volatility owing to imbalances in supply & demand, dampened market sentiments, etc. This could affect the pricing of the products in the near future, thereby compelling the manufacturers to reduce the profit margins to sustain in the competitive environment, which will in turn affect the power tools industry.
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Development of Multi-purpose Products and Their Accessories is Boosting the Market Growth
Industry leaders are focused on developing multi-purpose machines that can be used precisely while conducting numerous operations. On the other side, the consumers are demanding cordless power tool products that are easy to operate on high-torque and are light in weight, compact, and efficient. Therefore, the increasing demand for power tools with minimal errors from consumers is encouraging companies to develop and introduce disruptive innovations. For instance, Milwaukee Tool recently launched cordless nailer named M18 FUEL. This product is designed to deliver great productivity and comfort. It is also designed to fulfill the consumers’ daily household requirements.
Hence, the development of new and innovative products is foreseen to enable the market to flourish in the forecasted period.
Growth in Construction Industry and Manufacturing Sector in Emerging Economies to Boost the Market
Rapid growth in the construction industry is a major factor that is influencing the growth of the market. Key industry players in the market are manufacturing both cord and cordless tools that allow construction workers to use them wherever they want to. Among corded and cordless tools, cordless tools are mostly preferred in the construction industry.
Moreover, increasing use of power tools in the manufacturing sector is also playing an important role in pushing the market in the upward direction. In recent years, the usage of these tools in small- and mid-sized manufacturing enterprises has increased owing to their flexibility and capability of delivering productive solutions to their customers.
Price Fluctuations of Raw Materials to Hinder Market Growth
Power tools are expected to generate huge demand from the countries such as US, U.K., Japan, China, India and many more. However, price fluctuations of raw materials are an important factor affecting this market growth. Generally, such equipment is made up of materials such as steel, metal, and aluminum. Such materials are usually imported from other countries and the price fluctuations majorly depend on exchange rates and increasing volatility of the markets.
Hence, price volatility in raw materials is the primary factor that is hampering the growth of the market.
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Adoption of Electric Power Tools to Fuel the Market
On the basis of mode of operation, the market is categorized into electric, pneumatic, and others which includes hydraulic tools. It is been observed that electric-powered tools have revolutionized operational efficiency in the automotive industry as they save the time and efforts required for conducting various operations. According to the European Power Tool Association, the rechargeable battery industry has been investing heavily in research & development activities. As a result, cordless tools powered by lithium ion batteries are expected to witness a huge demand during the forecast period.
Furthermore, the demand for pneumatic tools is estimated to slow down as these tools are expected to be replaced by electric tools. Pneumatic tools work on compressed air and are conventional in nature but are resulting in overuse of energy. According to the U.S. Department of Energy, the tools that are powered with compressed air are less efficient for any manufacturing plant and that such tools are frequently used inaccurately. Therefore, the demand of these tools is anticipated to deteriorate over the forecast period.
Other tools such as hydraulic tools are anticipated to have a moderate growth over the forecast period.
Drilling and Fastening Tools Will Witness Huge Demand in the Forecast Period
In the scope of study, this market is divided into drilling & fastening tools, material removal tools, sawing and cutting tools, demolition tools and others, which include routing tools.
Drilling and fastening tools held the highest power tools market share in 2018. This is attributable to the advancements made in drilling technologies by the tools manufacturers. These advancements have enhanced the characteristics of powered tools such as resistance to the unbalanced temperature, high resistance to shocks and vibrations, and increased durability.
Material removal tools are anticipated to witness the highest growth, owing to their demand across car factories, metal processing workshops, and other industrial sites. Material removal tools such as grinders, sanders, and others are also having considerable penetration across residential and industrial projects.
Sawing and demolition tools are projected to grow moderately as they have a weaker hold in the market compared to the drilling tools and material removal tools.
Do-it-Yourself (DIY) Tools Application Segment to Hold the Highest Market Share
The Do-it-Yourself (DIY) application segment is projected to have a remarkable impact on this market share owing to the growth and power tools market trends promoted by DIY enthusiasts. This is mainly due to the increasing spending capability of households across the developed and developing countries. Furthermore, there is a broad spectrum of creative DIY enthusiasts, who are focused on getting equipped with the necessary tools. This in turn has attracted market players to focus on manufacturing tools that can be used across DIY applications.
Moreover, it has been noticed that major manufacturers such as Robert Bosch GmbH and Stanley and Decker are majorly emphasizing on manufacturing tools that are user-friendly. For instance, Robert Bosch is introducing sensor technology for power tools that can make them more intelligent and reduce the risk of injury. Owing to these initiatives and a positive response received from the users, DIY application segment is expected propel revenue generation for the market companies.
Industrial sector segment is anticipated to dominate the market but is expected to witness moderate growth over the forecast period. The dominance of this sector is due to the demand of the tools across industries such as aerospace, automotive, energy and power, construction, and others. However, despite its dominance, the depreciation rate of the equipment used in industries is rising owing to the increasing competitive pressure and the reluctance to convince the industrialists to switch from the manual to electric tools is further dampening the growth of this segment.
Asia Pacific Power Tools Market Size, 2019 (USD Billion)
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By region, the global market is segmented into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.
Among these, Asia Pacific has proven to be the dominant and the exponentially growing region in the global market. The demand for these tools is directly proportional to the increasing industrialization, infrastructure development, and urbanization in the region. Compiled with it is the increasing number of the Chinese players that are gaining control over the market by providing tools at competitive prices. Moreover, India is expected to witness significant growth in the market.
Following Asia Pacific, the Middle East & Africa region is projected to have a positive impact on this market. This is mainly owing to the rapid developments in the construction, power and energy, and oil & gas sectors. Furthermore, major players are also finding these regions to be of high potential to expand their business portfolio.
Europe and North America are expected to grow at a steady rate during the forecast period. These regions are considered more mature and therefore are not able witness exponential industrial growth. Likewise, Latin America is also expected to grow at a very moderate rate.
Prominent Players are Emphasizing on Acquiring Emerging Players
Major power tool manufacturers are focused, along with building a strong product portfolio, on acquiring small and mid-sized companies that have strong presence in the regional markets. This strategy is allowing companies to expand their business and customer base in other regions/countries. For instance, in January 2019, Stanley Black & Decker acquired 20% interest in MTD Holdings Inc., a private global manufacturer of outdoor power tools in the US, for USD 234 million. As per the acquisition agreement, Stanley has the option to acquire the remaining 80% of MTD by July 2021.
An Infographic Representation of Power Tools Market
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The power tools market report focuses on leading regions across the globe to offer a better understanding to end-users. Moreover, the report offers insight of the industry dynamics and analyzes technologies that are utilized at a rapid pace across the world. It also displays some of the key factors and restraints to help the readers to gain in-depth knowledge about the market.
2016 – 2027
2020 – 2027
2016 – 2018
Value (USD billion)
By Mode of Operation
By Tool Type
Fortune Business Insights says that the market value was at USD 25.48 billion in 2019.
Fortune Business Insights says that the market is expected to reach USD 31.28 billion by 2027
Growth of 3.1% CAGR will be observed in the market during the forecast period (2020 to 2027).
Within the mode of operation category, the electric category is expected to lead the market growth during the forecast period
Growth in construction industry and manufacturing sector in emerging economies is the key driver for market growth
Robert Bosch GmbH, Makita Corporation, Stanley, Black & Decker, Inc. and Hilti Corporation are the top companies in the market.
The material removal tool category is expected to grow significantly at the highest CAGR.
The revenue share of the market in Asia Pacific in 2019 was USD 8.84 billion
Development of multi-purpose products and their accessories is boosting the market growth.
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