SIC 3546 Handtools

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 within the battery-powered sector.

In 2003 the handtool industry shipped $3.04 billion worth of merchandise. During the mid-2000s the industry leaders remained Black & Decker and Danaher Corp. 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 handtool 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 $1.8 million, or 39 percent, of its revenues from its power tool division by the end of 1995, largely as 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 generally were 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...