SIC 3546

This industry includes establishments primarily engaged in manufacturing power-driven handtools, such as drills and drilling tools, battery-powered (cordless) handtools, pneumatic and snagging grinders, and electric hammers. Establishments primarily engaged in manufacturing metal cutting type and metal forming type machines (including home workshop tools), which are not supported in the hands of an operator are classified in SIC 3541: Machine Tools, Metal Cutting Types and SIC 3542: Machine Tools, Metal Forming Types; and those primarily manufacturing power-driven heavy construction or mining handtools are classified in a range of construction machinery and equipment industries.

NAICS Code(s)

333991 (Power-Driven Hand Tool Manufacturing)

Industry Snapshot

The U.S. power-driven handtool industry includes professional and nonprofessional tools such as electric drills, portable chain saws, portable electric sanders, and pneumatic hammers. The handtool industry is closely linked with the residential and commercial construction and home repair and renovation industries. The weak economy of the early 2000s caused downward pressure on demand in the commercial and industrial sectors, but a strong performance by the new housing industry helped sustain the industry. Advances in ergonomics and battery power technology—especially appealing to the do-it-yourself consumer—increased sales of the battery-powered sector.

In 2001 the handtool industry shipped $3.9 billion worth of merchandise, spent $1.9 billion on materials, and invested $91 million in buildings and other structures, machinery, and equipment. About 29 percent of the establishments in this category employed at least 20 people. California, Ohio, and Illinois had the largest concentrations of operations in this classification.

Organization and Structure

Success for the power-driven handtool industry depends on a variety of economic factors influencing industrial and consumer spending. Capital spending by business and industry directly affects power-driven hand-tool manufacturers, particularly in their manufacture of pneumatic power tools.

Pneumatic handtools operate by forcing compressed air through rotor blades. They are lightweight, durable, high performance tools used in demanding industrial applications. Examples of pneumatic products include: drills, grinders (metalworking machinery), pneumatic chip removal guns, hammers, ratchet wrenches, and sanders.

According to the 1996 edition of Manufacturing USA , retail sales to the do-it-yourself consumer sector accounted for 57 percent of the industry's total shipments in 1992 and have become a major influence on the success of the industry. Industry leader Black and Decker Corp., for example, received $1.826 million, or 39 percent, of its revenues from its power tool division by the end of 1995, largely a result of do-it-yourself retail sales at home improvement stores such as The Home Depot. Because of this success, Black and Decker planned to introduce an assortment of new products for do-it-yourself customers in 1996. This sales strategy emphasizes the industry's sensitivity to spending trends for home improvement, maintenance, and repair. Electric power handtools dominated these sectors because they were generally less expensive than pneumatic tools. The cordless battery-powered handtool market also gave the industry a boost in the early 1990s and continued its success through the 1990s. Examples of electric power handtools include: buffing machines, chipping hammers, drills, grinders, hammers, polishers, sanders, saws, shears, screwdrivers, and wrenches.

The power-driven handtool industry also includes gasoline-powered chain saws. This product class is directly tied to the success of the timber industry. Lower timber harvests, due in part to environmental concerns, became a serious problem for chain saw manufacturers in the early 1990s and continued to effect sales in through the end of the century. Moreover, lower consumer purchases—due to a declining use of firewood for home heating—contributed to a decade of flat sales. Gasoline powered chain saws comprised an estimated 11 percent of the industry's total shipments in 1992, but all internal combustion tools together accounted for less than 10 percent of shipments in 1997.

Background and Development

The power-driven handtool industry developed in conjunction with the rest of the United States' industrial growth. U.S. manufacturers often started as small operations producing specific power tools for local markets. As the United States grew into a world economic leader, the power-driven handtool industry likewise expanded internationally.

For example, Black and Decker (founded in 1910 in Baltimore, Maryland) first began manufacturing candy dippers and capping machines for milk bottles. By 1917 Black and Decker patented the first pistol grip, trigger switch electric drill. The company's success enabled it to begin international operations by 1918. Black and Decker products helped define the power tool industry. For example, the company introduced the first portable screwdriver in 1923, the first electric hammer in 1936, and the first portable electric drill for consumer use in 1946. In 1999 Black and Decker was the world's leading power-driven handtool manufacturer.

Another industry leader, Danaher Corp., was organized in 1969 originally as a Massachusetts real estate investment trust known as DMG, Inc. In 1989 the corporation entered the handtool market by merging with Easco Handtools, Inc., and by the mid-1990s handtools made up approximately half of Danaher's total sales. By opening its doors to this market, Danaher achieved sales of $897 million in 1992, the best year in the company's history for per share earnings. A year later, the company's international sales rose to more than 10 percent of total sales.

According to U.S. Industrial Outlook , the recession seriously hurt the handtool industry in 1990 and 1991, when overall shipments dropped by $163 million (6.9 percent). The industry recovered by 1994 when the value of shipments reached $3.5 billion, up from $2.9 billion in 1992.

During the early to mid-1990s, automation played a major role in reducing the number of workers employed by the industry. The falling employment rate had not affected the industry's continued status as a net importer by 1992, however, when imports comprised 27 percent and exports represented 14 percent of total shipments.

The proliferation of large home centers, such as The Home Depot and Lowe's, gave manufacturers additional markets in which to sell their products. Technology also boosted the power-driven handtool industry by opening new markets for cordless tools, which accounted for 15 percent of the industry's shipments in 1997.

According to the Census Bureau, battery-powered (cordless) handtools, which include driver/drills and other tools, accounted for 15 percent of total shipments in 1997, while electric power-driven handtools represented approximately 46 percent of total shipments. When combined, battery-powered and electric handtools represented 61 percent of the industry's total shipments. This emphasizes the success of the nonprofessional consumer handtool market, which represented 50 percent of the industry's shipments in the early 1990s. Pneumatic, hydraulic, and powder-actuated handtools, which are produced for industrial and professional customers, represented 29 percent of total shipments in 1997, while internal combustion power-driven handtools and unspecified handtools represented the remaining 10 percent of total shipments.

Industry growth depends upon increased expenditures in the home improvement, home repair and maintenance, and residential and commercial construction sectors. In addition, new battery technology has helped the industry expand the market for advanced cordless tools.

Companies continued to introduce new products to generate consumer demand in this category. For example, new products accounted for about a third of Black and Decker's sales. In 1999 the firm began marketing a new version of its Mouse, a small, hand-held sander and polisher priced at $60. The original Mouse had been launched with great success in the previous year. In 1999 the company also introduced a powerful hammer drill (priced at $72), a jig saw with a contoured two-finger trigger (priced at $45), a Pivot Driver cordless screwdriver (priced at $36) with a pistol grip that made it easier to drive screws into corners, and the Sandstorm 2-in-1 sander (priced at $48) with a palm grip designed to allow the consumer to use the tool on various projects.

Ergonomics—the engineering of tools for maximum comfort and minimal hazard to the human body—was an increasingly popular consideration for this industry. In 1999 Stanley Works redesigned the handles of many of its tools to better fit the human hand and to reduce the likelihood of injury from vibration and other stresses. For instance, the company incorporated a carbon-steel shank into its AntiVibe framing hammer to absorb the shock that traditional hammers transmitted to the human arm. Stanley Works also offered an ergonomic screwdriver with a diamond-textured handle made of soft elastomer and a layer of hard polypropylene, so that consumers could grasp the tool firmly without needing to squeeze hard enough to hurt their hands.

Current Conditions

Despite a sluggish economy in the early 2000s, the climate for handtools remained positive. Extremely low interest rates caused a surge in new housing starts, which jumped from 1.2 million in 2000 to an estimated 1.6 million in 2003. Whereas residential construction boasted sales among professionals, consumer uncertainty regarding the economy, as well as the war with Iraq, caused a trend toward "nesting." Home improvement and do-it-yourself projects rose as people postponed travel and other major undertaking, thus driving the consumer hand-tool market.

According to The Freedonia Group, an industrial market research firm in Cleveland, Ohio, U.S. demand for power tools is expected to increase at an annual rate of nearly 5 percent, reaching $9.4 billion in 2005. Growth will be driven by powerful, high-end tools and the continuing proliferation of cordless products. Shipments of cordless products are predicted to reach $1.5 billion by 2005, reflecting an annual growth rate nearing 10 percent. Professional buyers will continue to generate more revenues than consumers, but in the do-it-yourself market overall growth will outpace professional sales.

Industry Leaders

With 22,300 employees and sales of $4.4 billion in 2002, Black and Decker Corp. (Towson, Maryland) retained its place as the largest company that made primarily power-driven handtools. By the early 1990s Black and Decker had become an international company that carried the seventh most recognized brand name in the United States. Its brand recognition was also among the top 20 in Europe. In 1995 the company had expanded this international presence by beginning joint operations in India and China and introducing DeWALT power tools to Europe and Latin America. By 2002 big-box do-it-yourself stores Home Depot and Lowe's accounted for 20 percent of Black and Decker's sales.

The second largest U.S. power-driven handtool manufacturer was Danaher Corp. (Washington, DC), with 29,000 employees and sales of $5.6 billion in 2002. Founded in 1984 as a holding company, Danaher expanded by merging with Chicago Pneumatic Tool Company, Acme-Cleveland Corporation, Pacific Scientific Co., and Joslyn Corp. According to the International Directory of Company Histories , in 1994 Danaher Corporation was recognized as the world's largest producer of drill chucks, the country's largest producer and marketer of Swiss screw machine components, and the leading automotive tools supplier to the National Automotive Parts Association (NAPA) and Sears.

Other diversified firms that also competed in this category included Ingersoll-Rand Co. (Woodcliff Lake, New Jersey); Illinois Tool Works Inc. (Glenview, Illinois); Stanley Works (New Britain, Connecticut); Snap-On Inc. (Kenosha, Wisconsin); and Applied Power Inc. (Butler, Wisconsin).


The U.S. power-driven handtool industry employed 16,311 people in 2001, compared to 15,600 in 1994 and 17,100 in 1990. This included 11,037 production workers who earned an average hourly wage of $14.19. Total payroll for the industry was $517 million. Some of the occupations in the power-driven handtool industry include tool and die makers, machinists, mechanical engineers, drafters, blue collar worker supervisors, inspectors, industrial production managers, and stock clerks.

America and the World

The United States is a world leader in the manufacture of power-driven handtools, although in the early 1990s the nation imported more goods in this category than it exported. This was part of a trend reflected in other industries as well. In 1994 the U.S. trade deficit was $108.1 billion compared with $75.7 billion in 1993. Nevertheless, most U.S. manufacturers were significant exporters in the midto late-1990s. Black and Decker, for example, had total export sales (for all products) of approximately $2.0 billion in 1996, or 37 percent of its total sales revenues.

Major U.S. competitors included Germany, Japan, and Great Britain. The Robert Bosch Company, with its headquarters in Stuttgart, Germany, had total sales of $33.6 billion in 1991 and employed 181,498 people. Another large German power tool manufacturer was Stihl Andreas Co., which manufactured chain saws, hand saws, and replacement parts. The company had total sales of $1.2 billion in 1991 and employed 5,666 people.

In 1992 Sumitomo Electric Industries LTD of Osaka, Japan, exported $126.1 million worth of goods. The company had sales of $1.2 billion and 14,833 employees.

In Great Britain, Dobson Park Industries exported shipments worth $73,600 to the United States in 1992. Its power tool sales were $19,849, totaling 9 percent of the company's revenues.

Other large power-driven handtool manufacturers included Hitachi Koki Co. (Japan), Makita Corp. (Japan), Shibaura Engineering Works Co. (Japan), Hilti Ag Co. (Switzerland), Johnson Electric Holdings Ltd. (Hong Kong), and Kanematsu-Nnk Corp. (Japan).

Research and Technology

Most research in the power-driven handtool industry in the 1990s was directed toward ergonomics and portability. Ergonomic designs create tools that are more comfortable and efficient for the user. Long term use of poorly designed power-driven handtools can have serious consequences to workers' health and safety. Constant exposure to noise and vibrations can cause such injuries as hearing loss, carpal tunnel syndrome, and hand-arm vibration syndrome (HAVS). Injuries of this type cost companies an estimated $100 billion annually. For example, according to the Manufacturing Information Resource Center (MIRC) home page on the Internet, Pratt & Whitney reported 1,500 claims in 1994 averaging approximately $5,000 each, costing the company more than $5 million in claims that year. As a result, Pratt & Whitney made plans to reduce its cumulative trauma disorder (CTD) claims related to the use of power handtools by 10 to 15 percent, which would save the company $500,000 to $750,000 a year.

Improved ergonomic designs can significantly reduce injuries caused by long-term use of power-driven handtools. In the mid-1990s Stanley Tools presented a new line of ergonomically designed tools that help the user maximize job performance, enhance work quality, and minimize physical stress and fatigue. Stanley Contractor Grade tools, for example, featured cushioned, dual-durometer grips that improved user comfort and reduced the likeli-hood of the tool slipping in the user's hand. The tools lowered the number of repetitive motions needed to execute a given task and reduced the occurrence of CTDs.

The power-driven handtool industry has also changed due to the development of cordless, battery-operated tools. According to Business Week , the key advantages of cordless tools are indoor safety and outdoor convenience. Cordless tools were an expanding area for power-driven handtool manufacturers through the 1990s: in 1992, they accounted for 12 percent of the industry's total shipments, and increased 3 percent by 1997.

Further Reading

Guagenti, Toni. "Italian Maker of Parts for Power Tools Plans Virginia Beach, Va., Plant." Knight-Ridder/Tribune Business News , 17 November 1999.

Hughlett, Roger. "New Products Power B&D's 1999 Rebound: Keeping Customers Excited is Crucial to Tool Company's Revamping Efforts." Baltimore Business Journal , 28 May 1999.

Singer, Sherri. "A Better Grip on Ergonomic Design." Machine Digest , 5 August 1999.

Strickland, Amanda. "Stihl Unit Powers Up Orange Office Park." Triangle Business Journal , 26 November 1999.

"Strong Growth Seen for Portable Tools." American Metal Market , 25 February 2002, 16.

Tuttle, Al. "Cordless Tool Sales Hold Steady." Industrial Distribution , February 2003, C5.

U.S. Census Bureau. Statistics for Industry Groups and Industries: 2001 , January 2003. Available from .

Zid, Linda Abu-Shalback. "The Power to Do More." Appliance , February 2003, 43-44.

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