Cutlery and Handtool Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 948 cutlery and handtool manufacturers in the US produce nonpowered hand and edge tools; saw blades; and metal kitchen cookware, utensils, and nonprecious and precious-plated metal cutlery and flatware. Large firms may also produce hardware, industrial tools, power tools, and related products, such as storage systems.
Foreign Competition
Domestic handtool and cutlery manufacturers compete with foreign producers, which offer the same or similar products but enjoy a more favorable cost structure.
Variability in Raw Material Costs
The cost of raw materials, including ferrous and non-ferrous metals, can vary and affect margins and profitability for handtool and cutlery manufacturers.
Industry size & Structure
The average cutlery and handtool manufacturer operates out of a single location, employs 33-34 workers, and generates about $11 million annually.
- The cutlery and handtool manufacturing industry consists of about 950 firms, employs about 32,400 workers, and generates $10.4 billion annually.
- The industry is concentrated; the top 50 companies account for 70% of industry revenue.
- Large firms that manufacture cutlery or hand tools, which include Stanley Black & Decker, Snap-On, L.S. Starrett Company, and Lifetime Brands (Farberware, Hoffritz), may have global operations and generate a significant percentage of revenue from foreign markets.
- Handtool and saw blade manufacturers account for 81% of establishments, and kitchen utensil and cookware manufacturers account for 19% of establishments.
Industry Forecast
Cutlery and Handtool Manufacturers Industry Growth
Recent Developments
Sep 18, 2024 - New High for Producer Prices
- The producer price index for cutlery and handtool manufacturers, which measures prices before reaching consumers, rose 2.8% in July compared to a year ago after rising 4.7% in the previous July-versus-July annual comparison, according to the latest US Bureau of Labor Statistics data. July saw a new high for industry producer prices, which have been climbing steadily since about mid-2021. Meanwhile, employment by the industry dipped 1.5% year over year in July, and average wages at fabricated metal manufacturers rose 6.5% YoY in August to $26.59 per hour, a new high for the industry, BLS data show. After-tax profits for fabricated metal products companies jumped 29.5% in the first quarter YoY and a hefty 158% versus Q4 2023, according to the latest data from the Census Bureau.
- Builder confidence inched higher in September amid declining mortgage rates, Builder Online reports. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, builder confidence for newly-built single-family homes was 41 in September, up two points from a reading of 39 in August. The increase reversed four consecutive monthly declines. Still, the high cost of construction relative to household budgets is dampening builder sentiment for current housing market conditions. Also, home builders are expected to face competition from rising existing home inventory in many markets as the mortgage rate lock-in effect softens as mortgage rates fall. The NAHB’s chief economist is looking to the Federal Reserve Board to cut interest rates this month, lowering the cost of construction. The 30-year fixed rate fell to a 19-month low in September in anticipation of the Fed’s easing, according to Bankrate’s latest lender survey.
- The Home Depot – a leading seller of handtools – reported disappointing results in the second quarter and said it expects sales to weaken in the second half of the year as high interest rates cause consumers to become more cautious, according to an August press release. Excluding acquisitions, comparable sales (sales at stores open more than a year) for the second quarter decreased 3.3%, and comparable sales in the US fell 3.6%. Looking ahead, the company reported it expects comparable sales to decline between 3% and 4% for the 52-week period compared to fiscal 2023. The company’s CFO told CNBC that homeowners are now deferring projects due to a “sense of greater uncertainty in the economy.”
- According to Census Bureau figures, US capital expenditures for robotic equipment totaled $12,960 million (not statistically different than 2021) and accounted for 1.1% of total equipment expenditures in 2022. The manufacturing sector was the largest investor, accounting for more than half (56.2%) of all robotic equipment expenditures – nearly $7.3 billion that year. Amid a stubborn labor shortage, manufacturers rely increasingly on automation, including robots, for some tasks to achieve greater productivity. Also, collaborative robots (aka "cobots”) that work alongside humans are becoming increasingly popular with smaller manufacturers that cannot afford expensive industrial robots.
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