Amid Pandemic, Hand Tool Suppliers Find Silver Lining in Spike of DIY Activity

The US market for hand tools is forecast to register slow but steady growth through 2024 to nearly $6 billion, according to a new Freedonia Group analysis. In addition to COVID-related slowdowns in key markets like construction and manufacturing hindering near-term growth, the usual restraints will also continue to apply through the pandemic and beyond, namely:

  • slow price growth
  • reliance on low-cost imports
  • competition from power, used, and rental tools
  • the high durability of most hand tools, limiting replacement sales
  • limited innovation to encourage upgrade sales

Despite these compounding challenges, hand tool suppliers are finding a silver lining in the spike of home renovations occurring amid the pandemic, particularly as homebound consumers busy themselves with DIY projects.

How is COVID affecting the US market for hand tools?

The most significant impacts of the COVID-19 pandemic are expected in 2020 and 2021, as activity in construction, manufacturing, and automotive aftermarket sectors remains below pre-pandemic levels due to global supply chain disruptions and local efforts to curb spread of the virus.

Though professional sales will continue to drive hand tool market growth through 2024 – fueled by rapid anticipated rebounds in construction, manufacturing, and automotive repair activity as pandemic mitigation efforts are lifted – the consumer market is providing some near-term opportunity that’s lacking at present in the leading professional segment. In May, for example, Stanley Black & Decker upgraded its tools and storage equipment quarterly sales outlook to a 20% decline (after projecting a 30% decline in April), attributing the improved (albeit still negative) forecast to elevated DIY activity.

Evaluating opportunities in the DIY market for hand tools

Consumer sales accounted for 32% of US hand tool demand in 2019. Despite rising consumer demand for more sophisticated hand tools, DIY users tend to be more price sensitive than professionals and are less likely to purchase more expensive professional-grade models, restricting the consumer market’s value. They also tend to use their tools much less often than professionals, limiting replacement sales.

According to a survey conducted by The Freedonia Group, the most common reason US consumers purchase hand tools is that the item is needed for personal use on a planned project. Whether practical or merely aspirational, DIY projects have grown increasingly popular and elaborate since the 2007-2009 recession, driven in part by HGTV, Pinterest, and other home-improvement media, but also factors such as job losses and weakened incomes limiting spending on professional services.

As the coronavirus pandemic spurs another recession, similar trends are playing out in the DIY market for hand tools, and if the historical pattern holds, expect consumer demand to decline and professional sales to rapidly rise after the economy rebounds and consumers can accrue more disposable income to afford professional home upgrades.

Want to learn more?

Hands Tools is now available from The Freedonia Group.