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 1,000 cutlery and hand tool 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.

Variability in Raw Material Costs

The cost of raw materials, including ferrous and non-ferrous metals, can vary and affect margins and profitability for hand tool and cutlery manufacturers.

Competition from Foreign Manufacturers

Domestic hand tool and cutlery manufacturers compete with foreign producers, which offer the same or similar products but enjoy a more favorable cost structure.

Industry size & Structure

The average cutlery and hand tool manufacturer operates out of a single location, employs 33-34 workers, and generates $9-10 million annually.

    • The cutlery and hand tool manufacturing industry consists of about 1,000 firms that employ about 34,400 workers and generate $10 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, may have global operations and generate a significant percentage of revenue from foreign markets.
    • Handtool and saw blade manufacturers account for 82% of establishments, and kitchen utensil and cookware manufacturers account for 18% of establishments.
                                    Industry Forecast
                                    Cutlery and Handtool Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 14, 2022 - Lowe’s Exiting Canada
                                    • In a move that will impact handtool and saw blade manufacturers, Lowe’s in November agreed to sell its Canadian division, Lowe’s Canada, to US private equity firm Sycamore Partners for $400 million in cash. Lowe’s exit from Canada, where it operates about 450 corporate and independent affiliate dealer stores under various banners including RONA, Lowe's Canada, Réno-Dépôt, and Dick's Lumber, signals a shakeup in the Canadian hardware sector. Lowe’s entered Canada with the purchase of RONA in 2016 but sustained deep losses there. Previously, the company sold its much smaller retail operation in Mexico in 2018. Lowe’s chairman said "The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model,” and gives the hardware retailer the opportunity to focus on its core US retail business where it trails The Home Depot. The sale is expected to close in 2023.
                                    • The unadjusted US construction unemployment rate fell 1.1% in September 2022 from a year ago, down from 4.5% to 3.4%, according to a state-by-state analysis of Labor Department data released by Associated Builders and Contractors (ABC) in October. Forty-two states had lower unemployment rates over the same period, Arkansas and Wisconsin were unchanged, and six states were higher. Almost half of US states had estimated construction unemployment rates at or below 3%, ABC reported. Residential construction employment has fully recovered, while nonresidential construction employment remains below its pre-pandemic peak. September SA residential payroll construction employment was 162,000 above its pre-pandemic peak while nonresidential payroll construction employment was 67,000 below its pre-pandemic peak. Construction employment is a positive demand indicator for handtools as construction workers and companies are some of the largest end-use markets for handtools.
                                    • The strong value of the US dollar relative to the euro, Japanese yen, British pound, and other currencies is giving foreign producers a price advantage in the US market while making US exports more expensive, The Wall Street Journal reported in October 2022. The unfavorable exchange rates threaten to derail the rebound in US manufacturing, especially for companies with large overseas sales and operations. Industry analysts cited by WSJ said unfavorable exchange rates will likely crimp industrial manufacturers’ revenue. But exchange rates cut both ways: The currency shift is helping some domestic manufacturers that import foreign-made components for use in their US factories.
                                    • The Occupational Safety and Health Administration (OSHA) is considering lowering permissible levels of lead in the blood of employees in various industry sectors that could potentially affect more than 1,000 firms. Businesses in the fabricated metal product manufacturing sector (NAICS 332000), which includes cutlery and handtool manufacturers, would be impacted if OSHA takes action, according to The Fabricator. According to OSHA, some companies in the sector likely have employees with blood lead levels (BLLs) greater than 5 micrograms per deciliter. The agency, which issued advance notice of the proposed rulemaking in June, has agreed to extend the comment deadline two months to October 28 due to controversy. Many states already have lowered lead exposure thresholds, putting pressure on OSHA to re-examine its 45-year-old standard.
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