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 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.

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.

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.

Industry size & Structure

The average cutlery and hand tool manufacturer operates out of a single location, employs 33-34 workers, and generates about $11 million annually.

    • The cutlery and hand tool manufacturing industry consists of about 950 firms that employ about 32,400 workers and generate $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, 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 18, 2024 - Prices Continue to Climb
                                    • Producer prices for cutlery and handtool manufacturers rose 2.8% in March compared to a year ago, extending a steep and steady rise, according to the latest US Bureau of Labor Statistics data. New orders and shipments for fabricated metal products, which include cutlery and handtools, dipped in March compared to a year ago, down 0.9% and 0.4%, respectively, but were up sharply from February, according to the BLS. Employment by cutlery and handtool manufacturing firms grew 1.9% in March year over year, while average wages rose 5% over the same period to $26.66 per hour, a new high, BLS wage data show.
                                    • According to newly released 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.
                                    • The Home Depot, a leading retailer of handtools, utility knives, and blades, saw its sales fall last year, the company reported in February. Sales for fiscal 2023 (ended January) were $152.7 billion, a decrease of 3% from fiscal 2022. Comparable sales for fiscal 2023 fell 3.2%, and comparable sales in the US decreased 3.5%. “After three years of exceptional growth for our business, 2023 was a year of moderation,” said president and CEO Ted Decker. High mortgage rates and inflation caused customers to pull back on home improvement projects last year. 2023 was the first time that Home Depot – a bellwether of the home improvement industry – posted a decline in annual sales since 2009 when the housing bubble burst and blew up the US economy.
                                    • The Biden administration, in late December, extended the tariff rate quota (TRQ) agreement on steel and aluminum with the European Union until year-end 2025, The Fabricator reports. The agreement, which was due to expire at the end of December, allowed EU steel and aluminum exporters to avoid the 25% and 10% tariffs on steel and aluminum imposed in 2018 as long as the exports were below certain levels. The TRQ extension is an interim solution until the US and EU can finalize a broader agreement addressing the overcapacity and decarbonization of steel. Both countries are looking to replace the current tariffs with a system basing tariffs or fees on the level of carbon emissions attached to the production of a particular import. It remains to be seen whether replacing the current TRQ agreement on imported steel and aluminum with a tariff system based on greenhouse gas emissions would impact US buyers.
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