Pandemic Inflation & Its Effects On The Hand & Power Tool Industry
Professionals working in a variety of industries, including electronics, construction, vehicle repair, maintenance, and aerospace, have become aware of the advantages of power tools, such as increased efficiency and faster speed over manual tools. Power tools are now often used in both business and home settings.
The recent coronavirus (COVID-19) pandemic crisis had put practically every industry in danger and, as a result, had exposed the power tool market to short-term uncertainty in supply and demand. As the virus continued its spread across continents, the market experienced a sharp decline in both demand and volume during the first quarter of 2020.
The Effects of Pandemic Inflation on the Hand & Power Tool Industry
In the first quarter of the post-pandemic recovery period, COVID-19 had a significant influence on economic activities and created issues for the industrial sector. Due to the suspension of industrial operations and various restrictions on the cross-border movement of non-essential goods, the supply-side situation saw a considerable decline.
Power tool users primarily come from industries such as the automobile and construction sectors. They observed significant procurement prices and challenges in locating spare parts and components.
Since the COVID-19 pandemic had a fundamental impact on these industries, a quick recovery was unlikely to occur very soon.
Travel and global trade were both negatively impacted, supply chain management was notably disrupted, and purchase decisions were postponed owing to volatility. Until the virus was contained, all of these factors impacted the margins of power tool producers.
1. Automotive Production Was At a Standstill
The COVID-19 pandemic's obvious and significant impact on the traditional automobile industry was the temporary closure of several OEMs, suppliers and production facilities. In 2020, it was predicted that 7.5 million smaller cars will be built.
The pandemic was a significant, once-in-a-lifetime upheaval to an industry that was already going through a difficult time. As a result of the Covid cases, there were less components imported from China and similar effects also occurred in the European car sector.
2. Delays in Construction Projects
The market for power tools increased when the construction industry recovered from the economic collapse of 2008, and power tool makers made significant investments in this industry.
However, the construction industry was among the hardest affected by the epidemic, suffering from lay-offs, delayed construction, project halts, the unforeseen suspension of metalworking or woodworking industrial activity, and skeptical sentiment among buyers and property developers.
As a consequence, the demand for both manual and power tools was subsequently impacted by this.
3. Global Manufacturing Supply
With the initial COVID-19 outbreak in China, there was a significant interruption in the supply of raw materials and parts needed for machineries such as power tools and other vital pieces of equipment.
Currently, the nation produces over 20% of the intermediate goods sold globally in the supply chain and controls a sizeable piece of the electrical machinery industry's worldwide value chain.
Exports of intermediate items from China to the European Union (EU) fell noticeably in the electrical machinery industry. The majority of electronics and automakers temporarily closed down their facilities or decreased output, which hurt global commerce.
What Is The Outlook For The Power Tools Industry Since The Pandemic?
1. New Product Development
The power tool market has been making advancements in every area of ergonomics, tool design, battery performance, efficiency, and productivity, as well as other technologies.
Manufacturers are boosting their investments in cordless power tools to position themselves better to profit from opportunities in the fiercely competitive industry.
Numerous important players have made significant investments in research and development, which has fuelled the creation of more innovative items for the worldwide market.
Businesses are also devoting time and resources to developing and enhancing production facilities in order to produce more precise, long-lasting, and feature-rich hand and power tools.
2. National Investments
The businesses are also appealing for specific government assistance from their own governments, for example, to waive higher import customs, and subsidiaries, and decrease stamp duty to buy property and build a sustainable and viable manufacturing environment.
Several governments acted and began coordinated efforts with manufacturers to receive financial and legal aid in the procurement of cutting-edge technologies and technological upgrades of various facilities.
This is in response to the high and intensive growth in the requirements for the hand-operated power tools from a variety of industries, including automotive, industrial manufacturing, metalworking facilities, automotive & aerospace component manufacturing, and assembly units.
3. Automotive Industry Recovery
Automotive sales have been expanding globally as a result of factors including rising private car ownership across the board, notably with interest in electrically powered mobility and rising purchasing power.
In an effort to accelerate sales growth, automotive manufacturers all over the world are substantially capitalizing on power tools. Power tool sales are increasing significantly thanks in large part to the efforts of vehicle manufacturers worldwide to boost sales growth.
The Demand for Hand & Power Tools
The significant demand for goods like spanners/wrenches, vices, and pliers in the manufacturing, automotive, and industrial sectors supports a prospective market share.
The astonishing market share in many regional marketplaces is mostly attributable to the wide range of innovative and diversified items available in this category.
Over the course of the market predictions, there will be a significant market share for hand-operated tools in the industrial sector. A certain degree is being supported by the rapid industrial sector expansion due to the growing use by the vehicle repair and maintenance industry.
Furthermore, one factor boosting the growth of the hand tools market is the development of extremely durable tools combined with application-specific characteristics.
Additionally, professional-grade tools and kits have also been increasingly popular among home consumers in recent years, making this market segment the second fastest-growing market sector globally.
Related Article: Global hand tools market forecast and analysis for 2023 and beyond
The 2020 pandemic has had a significant impact on economic activity and created issues for the industrial sector. With recovery well on the way, the power tool market has been making advancements with new products being released to meet consumer needs. Automotive sales have also been expanding globally as people invest in new vehicles. Finally, the growth of the hand tools market indicates an ongoing still demand for these products.
If you are looking for a reliable manufacturing partner that can help you stay ahead of the competition, contact us today. We have years of experience working with companies in a wide range of industries and we would be happy to discuss your specific needs and find the best solution for you.