Hand Tool - Cutlery Manufacturing in The US Industry Report

WWW.IBISWORLD.
COM Hand Tool & Cutlery Manufacturing in the USDecember 2019 1
Cut deep: As imports satisfy rising consumer

demand, industry revenue is expected to decrease
IBISWorld Industry Report 33221

Hand Tool & Cutlery
Manufacturing in the US
December 2019 Gavin Ross
2 About this Industry 17 International Trade 33 Operating Conditions

2 Industry Definition 19 Business Locations 33 Capital Intensity
2 Main Activities 34 Technology and Systems
2 Similar Industries 21 Competitive Landscape 34 Revenue Volatility
3 Additional Resources 21 Market Share Concentration 35 Regulation and Policy
21 Key Success Factors 36 Industry Assistance
4 Industry at a Glance 22 Cost Structure Benchmarks
23 Basis of Competition 37 Key Statistics
5 Industry Performance 24 Barriers to Entry 37 Industry Data
5 Executive Summary 25 Industry Globalization 37 Annual Change
5 Key External Drivers 37 Key Ratios
7 Current Performance 26 Major Companies 38 Industry Financial Ratios
9 Industry Outlook 26 Stanley Black & Decker Inc.
11 Industry Life Cycle 27 Snap-on Inc. 39 Jargon & Glossary
28 The Procter & Gamble Company
13 Products and Markets 30 Edgewell Personal Care Co.
13 Supply Chain 31 Apex Tool Group
13 Products and Services 31 Cutco Corporation
15 Demand Determinants 31 Klein Tools Inc.
16 Major Markets
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WWW.IBISWORLD.COM Hand Tool & Cutlery Manufacturing in the USDecember 2019 2
About this Industry
Industry Definition This industry primarily manufactures also manufactures metal kitchen

hand tools, edge tools and metal cookware, utensils and cutlery (excluding
blades (e.g. screwdrivers, scrapers, products made by casting or stamping,
bits and saw blades). The industry without further fabrication).
Main Activities The primary activities of this industry are

Manufacturing nonpowered hand and edge tools
Manufacturing nonprecious and precious plated metal cutlery and flatware
Manufacturing saw blades and handsaws
Manufacturing metal kitchen utensils, pots and pans
The major products and services in this industry are

Cutlery, utensils, scissors and snips
Cutting tools and precision measuring tools
Edge tools, saw blades and handsaws
Mechanics’ hand service tools
Razor blades and razors
Other
Similar Industries 33251 Hardware Manufacturing in the US

This industry manufactures various forms of metal hardware, including hinges, handles, keys and locks.
33311 Tractors & Agricultural Machinery Manufacturing in the US

This industry manufactures agricultural machinery and equipment and powered home lawn and garden
equipment.
33351 Metalworking Machinery Manufacturing in the US

This industry manufactures power-operated tools that are used for finishing or shaping metal parts, which
are then used to manufacture other machines.
33399 Power Tools & Other General Purpose Machinery Manufacturing in the US
This industry manufactures powered hand tools.
33521 Vacuum, Fan & Small Household Appliance Manufacturing in the US

This industry manufactures small electric appliances and housewares, such as electric razors.
33991 Jewelry Manufacturing in the US

This industry manufactures jewelry or silverware using precious or semiprecious metals and stones.
44413 Hardware Stores in the US

This industry retails products manufactured by industry operators.
About this Industry
Additional Resources For additional information on this industry

www.americanknife.org
American Knife Manufacturers Association
www.hti.org
Hand Tools Institute
www.iska.org
International Saw and Knife Association
www.uscti.com
United States Cutting Tool Institute
www.census.gov
US Census Bureau
IBISWorld writes over 1000 US

industry reports, which are updated
up to four times a year. To see all
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WWW.IBISWORLD.COM Hand Tool & Cutlery Manufacturing in the US December 2019 4
Industry at a Glance
Hand Tool & Cutlery Manufacturing in 2019
Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24

Snapshot
$10.1bn -1.2% 0.5%
Profit Exports Businesses
$537.9m $2.6bn 1,017

Revenue vs. employment growth Consumer spending
Market Share
Stanley Black & 8 4.0
Decker Inc. 4 3.5
11.2%
0 3.0
% change
% change
Snap-on Inc. -4 2.5
11.1%
-8 2.0
The Procter &
-12 1.5
Gamble Company
8.0% -16
Year 11 13 15 17 19 21 23 25
1.0
Year 14 16 18 20 22 24 26
Edgewell Personal Revenue Employment
Care Co. SOURCE: WWW.IBISWORLD.COM
5.0% Products and services segmentation (2019)

12.2%
27.1%
Other
p. 26 Razor blades and razors
12.4%
Key External Drivers Cutlery, utensils, scissors and snips
Consumer spending
Number of households
Import penetration into
the manufacturing sector
Value of residential 14.5%
Mechanics' hand service tools
construction
18.2%
Trade-weighted index Edge tools, saw
blades and handsaws
p. 5
15.6%
Cutting tools and precision measuring tools SOURCE: WWW.IBISWORLD.COM
Industry Structure Life Cycle Stage Decline Regulation Level Medium

Revenue Volatility Medium Technology Change Medium
Capital Intensity Low Barriers to Entry Medium
Industry Assistance Low Industry Globalization High
Concentration Level Medium Competition Level High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 37
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive Summary The Hand Tool and Cutlery to make low-value, high-volume products
Manufacturing industry produces a range has made it easy for producers in
of consumer and professional products, developing economies to exploit
including tools, such as screwdrivers and operational efficiencies achieved through
saw blades; razors; cutlery; scissors and lower labor costs and reduced regulatory
cookware, such as pots and pans. oversights. Such efficiencies permit the
Although demand for industry products production of tools and cutlery that beat
has benefited from recovering many domestic industry goods on the
manufacturing and construction activity, basis of price. In an attempt to mitigate
the industry has contended with intense decreasing profit margins and revenue
competition from abroad, which loss from decreases in demand, industry
continues to capture a growing share of operators reduced the size of their staff
domestic demand. Over the five years to and decided to offshore their
2019, revenue for the Hand Tool and manufacturing facilities.
Cutlery Manufacturing industry is Industry revenue is expected to
increase at a slow rate over the five years
to 2024, as imports continue to satisfy
Operators reduced the size of their staff and rising demand from consumers, such as
decided to offshore their manufacturing mechanics, chefs and hairdressers.
Growth in manufacturing and
facilities to cut costs construction activity along with
heightened consumer confidence and
projected to decrease at an annualized spending are key drivers behind
rate of 1.2% to $10.1 billion, despite a increasing demand for industry-relevant
projected increase of 1.1% in 2019 products. In addition, the
specifically as a result of an increasing implementation of the United States-
number of households. Demand for the Mexico-Canada Agreement (USMCA) has
bulk of industry products depends on potential to bring new life to the domestic
growth in the number of households and auto manufacturing industry, fueling
consumer spending, which have both demand for hand tools. Consequently,
increased over the past five years. industry revenue is forecast to increase at
Industry participants have been losing an annualized rate of 0.5% to $10.4
market share to imports, which are billion over the five years to 2024. As
expected to grow at an annualized rate of imports continue to restrict growth,
2.1% over the five years to 2019. Imports production in these countries will likely
are expected to satisfy 56.2% of domestic also capture demand from the middle
demand in 2019. The relative stability of class in newly industrialized nations,
the manufacturing technologies required reducing industry exports.
Key External Drivers Consumer spending increase in 2019, representing a potential

Consumer spending drives demand for opportunity for the industry.
industry products. Consumers purchase
tools, razors, scissors, silverware and Number of households
cookware for daily household use. A household is defined as a person or
Stronger consumer spending translates group of persons that occupy a single
to higher sales for industry operators. housing unit, such as a house, apartment
Consumer spending is forecast to slightly or mobile home. An increase in the
Key External Drivers number of households will likely raise and businesses on residential
continued demand for consumer home products, construction. An increase in the
such as flatware, cutlery and cookware. value of residential construction
The number of households is expected to will likely increase demand for hand
increase in 2019. and edge tools. The value of residential
construction is expected to decline in
Import penetration into the 2019, posing a potential threat to
manufacturing sector industry operators.
Products made abroad in countries with
lower energy and labor costs increasingly Trade-weighted index
threaten this industry. These lower costs The trade-weighted index (TWI)
are passed along to consumers in the represents the value of the US dollar
form of reduced prices. Import relative to the currencies of the country’s
penetration is expected to decrease major trading partners. When the TWI
slightly in 2019. drops, US hand tools and cutlery become
more affordable to foreign buyers
Value of residential construction because the dollar has a lower value
The value of residential construction against foreign currencies. The TWI is
measures the spending by individuals expected to increase in 2019.
Consumer spending Number of households
4.0 1.5
3.5 1.2
3.0
0.9
% change
% change
2.5
0.6
2.0
1.5 0.3
1.0 0.0
Year 14 16 18 20 22 24 26 Year 14 16 18 20 22 24 26
SOURCE: WWW.IBISWORLD.COM
Current The Hand Tool and Cutlery

Manufacturing industry produces a Industry revenue
Performance range of small metal products for
6
consumers and professionals, including
hand and edge tools, mainly mechanics’ 3
hand tools and precision measuring
devices; cutlery and flatware, mainly 0
% change
knives, scissors and razor blades;
handsaws and saw blades; and pots, -3
pans and other cookware, mainly made

-6
from aluminum. Consumer spending on
these goods and professional services -9
that use these products, such as Year 11 13 15 17 19 21 23 25
mechanics, barbers and chefs, has
improved. At the same time, imports SOURCE: WWW.IBISWORLD.COM
have continued to make inroads into the

market, reducing the industry’s ability to annualized rate of 1.2% to $10.1 billion,
take advantage of increasing demand. despite an increase of 1.1% in 2019
Therefore, over the five years to 2019, specifically as a result of a growing
industry revenue has decreased at an number of households.
Rising imports The Hand Tool and Cutlery industry-relevant goods have increasingly
Manufacturing industry is dependent on been imported from countries with lower
consumer demand for household goods, labor costs than the United States. China
and professional services that use is the main source of shipments,
industry products, such as auto accounting for an estimated half of
mechanics’ shops, barbershops, salons imported hand tools and cutlery.
and restaurants. Growth in the number However, while the country accounts for
of households typically translates to the vast majority of imports, its rising
greater demand for consumer goods such manufacturing labor costs are beginning
as cutlery and cookware. In addition, to deter organizations from establishing
increasing employment has led to rising production facilities withing the country,
disposable income levels, which generally according to CNBC. Players with
lead to an increase in consumer demand manufacturing plants located in China
for professional services such as auto are on the lookout for lower-cost and
repair, haircuts and dining out. During more efficient alternatives. Consequently,
the five-year period, growth in the Taiwan has been a popular substitute due
number of households and disposable to its proximity relative to China,
income have bolstered demand for enabling players to maintain their
industry products. However, over the pre-established supply chain while
past five years, imports have captured a simultaneously capitalizing on a more
larger share of growth in domestic specialized and efficient labor pool.
demand than industry operators. Imports Taiwan’s share of imports is projected to
are projected to increase at an annualized increase at an annualized rate of 4.1%
rate of 2.1% to $9.7 billion over the five over the five years to 2019.
years to 2019, having grown from Imports compete with goods from all
satisfying 53.0% of domestic demand in of the industry’s product segments,
2014 to 56.2% in 2019. For decades, although they compete most heavily with
Rising imports low-value consumer products, such as 2.9% to $2.6 billion over the five years to
continued silverware. As a result, many industry 2019. This decline is mainly due to the
operators focus their domestic ability of foreign countries to produce
production on higher value-added industry-relevant products at a much
product segments, such as brand name lower cost than the United States,
razors and tools. However, even high-end causing imports to increase and exports
markets are a growing target for foreign to decrease. The industry’s main export
producers, as evidenced by the rise in markets include many of its import
imports from Germany, which generally sources, namely China, Mexico, Germany
produces higher-end metal goods in and Canada. Domestic manufacturers
contrast to China or Mexico. As primarily export these higher value-
compared with imports, exports are added products, in which China and
expected to fall at an annualized rate of Mexico do not specialize.
Profit decreases This industry’s average profit margin has

decreased over the five years to 2019. Theincreased price of
Significant growth in low-cost imports steel has contributed to
has limited many operators’ ability to
raise prices to cover heightened costs. shrinking profit
However, many operators have
responded by reducing employment, Currently, heightened demand has
increasing investment in more automated enabled industry operators to produce
computer numerical control (CNC) at levels closer to their plants’
machines, outsourcing or offshoring capacities, which has resulted in
more of their manufacturing and, in lower manufacturing costs per unit.
some cases, exiting the industry However, while heightened demand
altogether. As a result, over the five years has created a more favorable pricing
to 2019, the number of establishments is environment for industry products, the
anticipated to fall at an annualized rate of increased price of steel, due in part to
1.2% to 1,124 locations. However, tariffs established by the current
industry employment is projected to presidential administration, has also
increase slightly at an annualized rate of contributed to shrinking profit. As a
0.5% to 35,855 workers, as the largest result, profit, measured as earnings
operators continue to hire more workers before interest and taxes, has decreased
because they are less vulnerable to from 7.4% of revenue in 2014 to 5.3%
threats compared with smaller operators. in 2019.
Industry As a result of increasing construction,

manufacturing activity and consumer
hand tools and cutlery when considering
consumers’ enhanced ability and
Outlook spending, the Hand Tool and Cutlery willingness to purchase these products.
Manufacturing industry is poised to However, even though industry demand
increase over the five years to 2024, is projected to increase, imports are
although remaining well below the expected to continue to capture most of
annualized growth of the US economy. As the growth in domestic demand.
the housing market grows, the number of IBISWorld projects industry revenue to
homeowners will likely increase, increase at an annualized rate of 0.5% to
indicating steady demand growth for $10.4 billion over the five years to 2024.
Downstream demand Disposable income is projected to rise,

enabling consumers to spend more on Higher
spending on home
improves
cutlery and cookware. Warehouse clubs improvement will help
and supercenters such as Costco
Wholesale Corporation and Walmart Inc. boost demand
are generally the primary outlets for
these products, with their revenue share stores such as the Home Depot Inc. and
increasing every year. As these stores Lowe’s Companies Inc. are the largest
expand and more consumers become suppliers of these consumer products.
aware of the savings they have to offer, Similar to warehouse clubs and
they will continue to be major sales supercenters, industry operators that
outlets for industry operators, develop relationships or retain contracts
particularly for smaller products such as with these stores are in a better position
razors, scissors, utensils, pots and pans. to gain from growing consumer demand.
Manufacturers that establish Additionally, sales to professionals will
relationships with these major retailers likely rise, alongside higher consumer
will be better positioned to compete with spending on services. Professionals such
foreign producers, as consumers are as auto mechanics and contractors are
attracted to these stores for the savings also expected to benefit from stronger
they advertise. growth in manufacturing and
As the housing market continues to construction activity as more consumers
improve, increased spending on home purchase automobiles and start
improvement projects is expected to help remodeling projects over the next five
boost demand for hand and edge tools years, directly contributing to hand and
from this industry. Home improvement edge tool demand.
Decreasing imports Over the five years to 2024, imports are 0.2% over the five years to 2024. As the
and exports forecast to increase at an annualized rate TWI drops, US hand tools and cutlery
of 0.2% to $9.8 billion, falling slightly to become more affordable to foreign buyers
56.0% of domestic demand. Production because the dollar has depreciated
from China, Taiwan, Mexico and against foreign currencies.
Germany is expected to grow and As a result of the expected depreciation
continue to dominate imports during of the dollar, exports are forecast to
the five-year period. However, the increase slightly at an annualized rate of
trade-weighted index (TWI) is 0.7% to $2.7 billion over the five years to
anticipated to decrease an annualized 2024. An expected decrease in the TWI
Decreasing imports will likely lead to US goods becoming imports is expected to further encourage
and exports more affordable to foreign buyers, and US manufacturers to seek operational
therefore, exports are expected to efficiencies through wage reductions and
continued
increase. Additionally, Mexico increased automation. Over the five years
represents one of the fastest-growing to 2024, industry employment is forecast
export markets despite being a dominant to increase slightly at an annualized rate
source of import competition. Rising of 0.2% to 36,256 workers. Additionally,
industrial activity has expanded the industry participation is expected to
country’s middle class and per capita decrease slightly as more manufacturing
disposable income levels. In turn, this activity moves abroad. Consequently, the
trend has enabled higher consumer number of enterprises is projected to
spending on tools, razors and decline at an annualized rate of 0.4% to
kitchenware imported tariff-free from the 995 companies. As a result of cost-cutting
United States under the North American measures, the average industry profit
Free Trade Agreement. margin, measured as earnings before
The combination of ongoing price- interest and taxes, is anticipated to
based competition with less expensive increase to 5.7% of revenue in 2024.
Life Cycle Stage Industry value added is growing at
a slower rate than US GDP
Imports satisfy close to half of
domestic demand and are rising
The number of industry operators is decreasing
Industry Life Cycle The Hand Tool and Cutlery this over the five years to 2019 despite
Manufacturing industry is in the the fact that hand tools, razors and
decline phase of its life cycle. cookware are basic and established
Thisindustry is Demand for the industry’s consumer products. This business strategy is
in D
ecline and professional products is dependent especially prevalent among companies
on household spending patterns, in the razor product segment. While new
in addition to construction and brands and products are not normally
manufacturing activity. The other key traits of a declining industry, a high and
component of demand is import increasing number of such products is
penetration; imports have reduced being manufactured abroad, which has
demand for decades and are the moved the industry into a state of
primary cause of the industry’s decline. decline. An additional sign of decline is
Over the 10 years to 2024, industry the number of companies operating in
value added (IVA), which measures the the industry, which has dropped over
industry’s contribution to the US the past five years and is expected to
economy, is expected to decrease at an continue to drop.
annualized rate of less than 0.1%. In In 2019, imported products are set to
comparison, US GDP is projected to account for 56.2% of domestic demand.
grow at an annualized rate of 2.2% This level is forecast to decrease slightly
during the same period. at 56.0% of domestic demand by 2024.
IVA growth that is slower than US As a result, the industry is producing at
GDP is indicative of a declining industry. levels substantially below its production
Generally, consumers increase their levels of several decades ago. Since
expenditure on home mechanics’ tools, industry operators are forced into an
razors, cutlery and cookware when their even smaller portion of the market and
disposable incomes rise. Consumer can often cost-effectively produce only
product companies attempt to further high-end products, such as brand-name
stimulate demand through frequent razors and tools, their production levels
product introductions alongside are not expected to ever match levels of
advertising campaigns. They have done past decades.
Products & Markets

Supply Chain | Products and Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain KEY BUYING INDUSTRIES

42371 Tool & Hardware Wholesaling in the US
Hardware wholesalers demand hand and edge tools, lawn and garden equipment and
machine tool accessories from this industry.
42382 Farm, Lawn & Garden Equipment Wholesaling in the US
Farm and garden machinery and equipment wholesalers are supplied with a variety of farm
machinery and equipment manufactured by enterprises operating within this industry.
42421 Drug, Cosmetic & Toiletry Wholesaling in the US
Wholesalers in this industry demand razor blades and razors.
44411 Home Improvement Stores in the US
Home improvement stores purchase and on-sell products and services manufactured by
enterprises operating within this industry.
44413 Hardware Stores in the US
Hardware stores purchase a variety of hand and edge tools, lawn and garden equipment,
electrical equipment and supplies and handsaws and saw blades from enterprises operating
within this industry.
44422 Nursery & Garden Stores in the US
Nursery and garden centers are engaged in selling various lawn and garden equipment,
manufactured by enterprises operating within this industry.
45111 Sporting Goods Stores in the US
Sporting goods stores are engaged in selling a variety of sporting goods to individuals. Some
of these goods include a variety of hunting and sporting knives produced by operators in this
industry.
45211 Department Stores in the US
Department stores sell this industry’s cutlery, silverware, pots and pans.
45291 Warehouse Clubs & Supercenters in the US
Big box retailers stock cutlery, cookware and hand tools to sell through their household goods,
hardware and garden departments.
KEY SELLING INDUSTRIES

32521 Plastic & Resin Manufacturing in the US
Plastic resins are a major component in the manufacture of cutlery and flatware, since they
are often used to form handles.
32611 Plastic Film, Sheet & Bag Manufacturing in the US
Plastic films and bags are used to package tools, cookware and cutlery.
33122 Steel Rolling & Drawing in the US
Steel is the main raw material used to produce hand tools, cookware and cutlery.
33131 Aluminum Manufacturing in the US
Aluminum is a critical input in the manufacture of some tools, cookware and utensils.
33211 Metal Stamping & Forging in the US
Stamped and forged metal goods are further processed by industry operators to make hand
tools and cutlery.
Products and Services Razor blades and razors generating 27.1% of revenue in 2019.
Razor blades and razors comprise the This industry primarily engages in
Hand Tool and Cutlery Manufacturing manufacturing razor blades and razors,
industry’s dominant product segment, excluding electric, for the personal care
Products & Markets
Products and Services Products and services segmentation (2019)

continued
12.2%
Other
27.1%
Razor blades and razors
12.4%
Cutlery, utensils, scissors and snips
14.5%
Mechanics' hand service tools
18.2%
Edge tools, saw
blades and handsaws
15.6%
Total $10.1bn Cutting tools and precision measuring tools
segment and the commercial and purchase these products, and demand
professional segment of this industry. for their services is closely tied to
Disposable income and consumer manufacturing and construction activity.
spending largely determine demand for
these goods. Recently, this segment has Cutlery, utensils, scissors and snips
stagnated as consumers prefer low-cost The cutlery segment, which is expected to
substitutes such as disposable razors account for 12.4% of industry revenue in
despite expanding disposable income. 2019, includes metal kitchen cookware,
stamped and spun utensils (both
Mechanics’ hand service tools excluding and including aluminum),
Mechanics’ hand service tools, cutlery and flatware (except precious)
accounting for 14.5% of industry revenue manufacturing. This segment of
in 2019, comprise hand tools primarily kitchenware is largely determined by
used for assembly, maintenance and disposable income. However, this
repair purposes. Products include segment has contracted as it has been
wrenches, ratchets, screwdrivers and outpaced by other segments including
pliers. Similar to hand and edge tools, razor and razor blades.
demand for these goods is largely tied to
construction and manufacturing activity, Cutting tools, precision measuring
which affects demand for contractors and tools and other products
mechanics which comprise a significant Cutting tools and precision measuring
customer base. tools are expected to account for 15.6% of
industry revenue in 2019, and include
Edge tools, saw blades and handsaws parts for machines and power-driven
Edge tools, saw blades and handsaws are hand tools, such as dies and
expected to account for an estimated interchangeable cutting tools, and
18.2% of industry revenue in 2019. This precision measuring tools. Other
industry primarily engages in products include all other miscellaneous
manufacturing saw blades, including hand tools that are not included in the
those for power sawing machines, and other segments. This category is
manufacturing hand and edge tools. anticipated to account for 12.2% of
Mechanics and contractors primarily industry revenue in 2019.
Products & Markets
Demand Demand for products from the Hand Consumer confidence and per
Determinants Tool and Cutlery Manufacturing industry capita disposable income
is largely correlated with construction Together, consumer confidence and per
activity, manufacturing activity, capita disposable income are largely
consumer confidence and per capita responsible for the level of consumer
disposable income. Demand declines spending in the economy. While
with growth in substitute product consumer spending has an effect on
availability, which is generally the result purchases of all of this industry’s
of rising imports. products, it is a particularly important
determinant of spending on kitchenware
Construction activity and cutlery. Consumer confidence and
Heightened construction activity per capita disposable income have grown
stimulates demand for this industry’s over the past five years. As a result,
dominant product segment, hand and consumer spending on this industry’s
edge tools. These tools are used by products has grown slightly over the
downstream industries to plane and past five years.
finish lumber for construction;
construction operators in the building Substitute goods
process also use them. Growth in Similar to many manufacturers, this
construction also increases demand industry’s operators are subject to a
for saw blades and handsaws, which are high level of import competition.
used in carpentry applications. Overall, Imports generally come from
construction activity has increased over countries with lower labor costs;
the five years to 2019, including a greater reduced costs getpassed along to
number of housing starts and increasing consumers in the form of lower prices.
values of residential and private Imports within this industry, and the
nonresidential construction. manufacturing sector generally, have
grown over the past five years, reducing
Manufacturing activity demand for US-made tools, cutlery
Many of this industry’s tools are used and cookware.
inmanufacturing processes, including Additionally, this industry contends
processes that are automated and with competition from products made
those that are done manually. Many of substitute materials. Ceramics are
domestic manufacturing industries’ the primary source of competition in
structural decline has been exacerbated this arena since blades and cookware
by outsourcing and offshoring trends. are often made from clay-based
These trends harm industry operators ceramics rather than metals. Plastic
since manufacturers tend to move goods also compete with some of
entire supply chains with them when this industry’s products (e.g. utensils
they move abroad. Overall, employment and kitchen containers), but are
in the domestic manufacturing industry generally considered inferior goods
has grown considerably over the past whose demand falls as disposable
five years. income increases.
Products & Markets
Major Markets Major market segmentation (2019)

3.9%
Grocery stores, department
stores and pharmacies
14.1%
Hardware stores and specialty shops
37.0%
Big-box retailers and
home improvement centers
19.1%
Commercial and
professional markets
25.9%
Total $10.1bn Exports
The following market share segmentation Big-box retailers and home

is estimated based on data from the Hand improvement centers
Tool and Cutlery Manufacturing Big-box retailers and home improvement
industry’s largest public companies. centers have grown over the past five
Online sales of hand tools and cutlery years, taking market share from other
have increased tremendously over the types of retailers and causing many of
five years to 2019, both from retailers their competitors to shrink in size or go
with physical stores and from online- out of business. As a result, the
only retailers. A retailer’s online sales importance of big-box retailers and home
are included within its primary market improvement centers such as Walmart
(i.e. Walmart Inc.’s online sales are Inc., Costco Wholesale Corporation and
included in the big-box retailers market). Lowe’s Companies Inc. as a market for
Online-only retailers, such as Amazon. cutlery and hand tools has increased.
com Inc., (Amazon) are accounted for in Online-only retailers, most notably
the big-box retailers market. Amazon, have grown in a similar fashion
over the past five years and are expected
Commercial and professional markets to continue strengthening their market
Professional or commercial users that share. In total, this market segment is
purchase directly from wholesalers estimated to generate 37.0% of industry
demand many of this industry’s products. revenue in 2019.
Such products include cutlery sets used
by professional chefs, hand tools Exports
intended for professional mechanics and International trade in this industry is
scissors for barbers. Tools and equipment significant. Exports are expected to
for professional use are typically higher account for 25.9% of total industry
quality than those sold to consumers, and revenue in 2019. Although exports
their buyers are typically less price have declined slightly in absolute terms
sensitive. As a result, products for this and as a share of revenue over the past
market are less likely to be made abroad, five years, they still represent a large
and hence, more likely to be made by this market for hand tools and cutlery. The
industry. Sales in this market account for vast majority of industry exports go to
19.1% of revenue in 2019, and have North American Free Trade Agreement
remained stable over the past five years. (NAFTA) member countries Canada and
Products & Markets
Major Markets Mexico, which account for a combined big-box retailers. Grocery stores,
continued 43.9% of all exports. department stores and pharmacies
are anticipated to account for 3.9% of
Grocery stores, department industry revenue in 2019. The diverse
stores, pharmacies, hardware retailers that comprise this market
stores and specialty shops segment are better able to compete in
In general, retailers outside of the specialized or high-end products that
big-box, online and home improvement big-box merchants do not sell.
categories have lost market share in Examples include specialty tools that
this industry over the past five years. are only carried by bicycle shops or
Losses stem from the higher relative top-of-the-line cutlery sets sold by
operating costs associated with smaller independent retailers. In 2019,
sales volumes. As a result, operators in specialty shops and hardware stores
this market segment have had difficulty are estimated to account for 14.1% of
competing on the basis of price with industry revenue.
International Trade Exports

Exports are expected to decrease at an Industry trade balance
Level & Trend annualized rate of 2.9% to $2.6 billion

6
over the five years to 2019, representing
xports in the
E 25.9% of the Hand Tool and Cutlery 3
industry are H
igh Manufacturing industry’s revenue. The 0
and D
ecreasing importance of international markets has
$ million
been growing for domestic manufacturers -3

Imports in the over the past decade. However, the value -6
industry are H igh of exports has fallen in recent years due
and I ncreasing to a rise in the trade-weighted index -9
(TWI). As the TWI increased, the dollar -12
appreciated relative to the currencies of Year 11 13 15 17 19 21 23 25
major trading partners, making it more Exports Imports Balance
expensive for foreign buyers to purchase SOURCE: WWW.IBISWORLD.COM
US products. The top export destinations

are Canada, Mexico, China and Germany. expected to increase at an annualized
These nations are expected to account for rate of 2.1% to total $9.7 billion. This
29.3%, 14.6%, 4.8% and 4.7% of exports, value represents 56.2% of domestic
respectively, in 2019. High export levels demand for hand tools and cutlery. The
are mainly driven by trade with Canada top import sources are China, Taiwan,
and Mexico due to the NAFTA agreement Germany and Mexico. Goods sourced
and expansion into growing markets, from China have historically driven the
such as China. increase in import trade and currently
represent 53.4% of imports. China’s
Imports strong manufacturing capabilities
Domestic operators have been coupled with relatively low labor costs
steadily losing market share to and well-developed logistics networks
foreign manufacturers for decades. enable the country to produce goods at a
Over the five years to 2019, imports are lower price than US manufacturers.
Products & Markets
International Trade
continued
Exports To... Imports From...

5.2% 4.2%
Mexico
Germany
4.7%
4.8% Germany
China 8.7%
Taiwan
14.6%
Mexico
46.6%
Other
28.5%
29.3%
Canada
Other 53.4%
China
Year: 2019 Total $2.6bn Total $9.7bn

SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA SOURCE: USITC
Products & Markets
Business Locations 2019
West
AK
0.2 New
England
ME
Great Mid- 0.4
Lakes Atlantic 1 2
NY 3
WA MT ND 5.0
5 4
2.0 0.9
0.3 MN
Rocky 2.5
WI
OR Mountains SD
0.3
Plains 3.4 MI
7.6
PA
5.3
6
7
2.5 ID IA OH 9 8
1.0 WY 1.7 6.5
0.0
NE IL IN WV VA
7.0 2.5 1.6
0.3
West NV
0.3
KY
0.5 UT MO
0.9 NC
0.8 CO KS 2.5 2.1
1.1 1.3 TN
1.6 SC
CA
13.3
OK AR
Southeast 1.4
GA
0.5 0.7 AL 1.4
AZ MS 0.8
NM
1.6
0.4 Southwest 0.3
TX LA
0.4 FL
3.8 3.4
West Establishments (%)
HI Less than 3%
0.1 Additional States (as marked on map) 3% to less than 10%
1 VT 2 NH 3 MA 4 RI 10% to less than 20%
0.4 0.2 2.8 0.9 20% or more
5 CT 6 NJ 7 DE 8 MD 9 DC
2.7 2.9 0.1 0.3 0.0
Products & Markets
Business Locations In general, manufacturing industries

Distribution of establishments vs. population
tend to locate their operations near large
population centers or in areas that create
30
supply chain efficiencies with upstream
suppliers, downstream markets and ports
of trade. The Hand Tool and Cutlery 20
Manufacturing industry’s locations are
most heavily concentrated in the Great
%
Lakes, West, Southeast and Mid-Atlantic 10
regions. Among individual states,
California leads with 13.3% of all US
locations, followed by Michigan (7.6%) 0
and Illinois (7.0%).
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
The Great Lakes
With 27.0% of establishments in 2019,
the Great Lakes region has the largest Establishments
concentration of industry locations. Its Population
dominance in terms of industry SOURCE: WWW.IBISWORLD.COM
establishments reflects the fact that the

region is the manufacturing base for establishments since they are the
much of America’s motor vehicle, first-, second- and third-most
electrical and food processing industries. populous regions in the country,
Therefore, industry operators tend to respectively. As a result, industry
locate in the region to be close to product operators locate here because of
demand, which reduces transportation the large consumer and commercial
costs and turnaround time. Further, the markets the West, Southeast and Mid-
Great Lakes region is a trade corridor Atlantic provide, which account for
with Canada, which is by far the single- 18.5%, 14.8% and 13.6% of industry
largest export destination for this establishments, respectively.
industry. Industry leader the Procter & Additionally, the West is the
Gamble Company has its headquarters in country’s primary gateway to
Ohio, and the state hosts the most China for export trade, which is a
locations for kitchen utensil, pot and pan competitive advantage since China
manufacturing. Other significant is a significant export destination.
companies with their primary facilities in Both the West and Southeast can
the region include Snap-on Inc. export easily to Mexico, another
important export destination, while the
The West, Southeast and Mid-Atlantic West and Mid-Atlantic also border
The Southeast, West and Mid-Atlantic Canada, which is by far the industry’s
regions have a major share of industry primary export destination.
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share IBISWorld estimates that the top four decrease at an annualized rate of 1.8% to
Concentration companies operating in the Hand Tool an expected 1,017 enterprises.
and Cutlery Manufacturing industry Consolidation has occurred as larger
have a combined market share of 35.3% enterprises have purchased smaller
Level
in 2019, which is a slight decrease in players to gain market share through the
Concentration in this market share concentration from the expansion of product lines or through
industry is M
edium previous period. This low-to-moderate increasing their geographic scope.
level of market share concentration Furthermore, many companies exited
indicates that revenue generated by the industry during the economic
companies operating in this industry is downturn and never returned as larger
spread across a relatively large number companies had already increased their
of industry participants. Furthermore, dominance. Additionally, heightened
the vast majority of industry operators competition from imports has created
are small enterprises. In fact, 70.3% of further barriers for new operators to
companies in this industry employ fewer enter the industry. Certain major
than 20 people, while less than 10.0% of players, such as Stanley Black & Decker
operators have over 100 employees. Inc. and Snap-On Inc., have
Over the five years to 2019, the total outperformed the industry, contributing
number of hand tool and cutlery to increasing market share during the
manufacturing businesses is forecast to five-year period.
Key Success Factors Having an extensive distribution network Establishment of export markets
Recent consolidation among retailers has Establishment of and access to
resulted in fewer distribution outlets, export markets provides operators
IBISWorld identifies which increases downstream supply chain with a buffer during periods
250 Key Success risks for industry operators. Enterprises when domestic demand is weak
Factors for a can reduce this risk with more extensive or weakening.
business. The most and diversified distribution networks.
Establishment of brand names
important for this
Access to the latest available and most Branding is highly important in all
industry are: efficient technology and techniques product segments of this industry,
Access to the latest technologies helps since brand loyalty among consumers
operators improve products and and commercial buyers largely
production methods. determines purchasing decisions.
Effective quality control Production of premium goods/services

Competition in this industry is Domestic manufacturers in this
based largely on product quality industry generally operate more
and consistency. Extensive quality competitively at the higher end of
control procedures aid in the the market, where competition from
production of high-quality goods. low-cost imports is less significant.
Cost Structure Cost structure segments are broken down Purchases

Benchmarks based on the average operator in the Purchase costs have remained stable
Hand Tool and Cutlery Manufacturing over the past five years at 35.1% of
industry. Therefore, segments may vary industry revenue. By segment, hand
based on the size and scope of an and edge tools exhibit the highest
individual company. purchase costs, accounting for more
than half of total industry materials
Wages consumed by kind. Within that
Wages are expected to consume 20.6% of segment, steel shapes and forms
industry revenue in 2019. Wages have (excluding castings) represent the
only increased at an annualized rate of single-largest purchase category. The
1.7% over the past five years, outpacing kitchen utensils, pots and pans segment
the slight growth in employment. also accounts for a significant share of
However, revenue has been decreasing total industry costs at one-fifth of all
during the five-year period, causing materials consumed, with aluminum
wages as a share of revenue to increase forming one-fifth of total segment costs.
from 17.8% in 2014. Improvements in
production methods, including the use of Profit
more automated computer numerical Profit, measured as earnings before
control (CNC) machines to form high-end interest and taxes, has decreased over the
tools and knives, has enabled five years to 2019. During this time, profit
comparatively lower employment levels. has moved from 7.4% of revenue in 2014
Sector vs. Industry Costs
Average Costs of
all Industries in Industry Costs
sector (2019) (2019)
100 n Profit
7.3 5.3
n Wages
12.1 20.6
n Purchases
80 n Depreciation
n Marketing
n Rent & Utilities
n Other
Percentage of revenue
60
35.1
54.6
40 2.2
2.3 1.1
2.5
20 1.9 0.3
33.4
21.3
0
Cost Structure to 5.3% in 2019. Decreasing profit during investing in advertising campaigns to
Benchmarks this period was a consequence of gain market share.
increasing wage costs, additional
continued
research and development investments Rent
and a strengthening US dollar that deters Rent is estimated to account for 1.0% of
foreign consumers from purchasing industry revenue in 2019. Costs related to
American-made products. Additionally, rent are typically leased office space and
price-based competition, both internally manufacturing facilities, which are
and externally, have further contributed usually located in more rural areas where
to a falling profit margin. Foreign rent costs are lower.
countries produce industry products at a
lower cost, and therefore, the industry Utilities
experienced price competition from Utilities are set to account for 1.3%
imported goods. of industry revenue in 2019, and
include electricity, natural gas, water
Depreciation and sewer costs for offices and
Depreciation is estimated to consume manufacturing facilities.
2.2% of revenue in 2019. The machinery
used by industry operators has not Other
changed significantly and typically lasts a Other costs include inventory expenses,
long time; therefore, depreciation costs professional and business fees, insurance
are relatively low compared with other expenses, maintenance and repairs and
manufacturing industries. other administrative costs. Other costs
have remained high over the past five
Marketing years due to merger and acquisition
Marketing costs are expected to activity, which increases legal fees and
account for 1.1% of revenue as a result of administrative costs. These costs are
large brands, such as the Procter & expected to account for the remaining
Gamble Company’s Gillette and Venus, 33.4% of industry revenue in 2019.
Basis of Competition Internal competition Some companies are perceived to be

The Hand Tool and Cutlery higher quality manufacturers than
Level & Trend Manufacturing industry competes others, and some are believed to have
primarily on the basis of price, product better customer service. Subsequently,
ompetition
C in this reputation, product quality, brand these companies experience strong
industry is H
ighand recognition, strong customer brand name recognition (e.g. Snap-on
the trend is S teady relationships, the breadth of product Inc., Klein Tools). By committing to
lines and product innovation. The blades customer service, product innovation,
and razors product segment is highly product quality and reliable distribution
competitive in terms of new technology, systems, operators can attain a
in addition to product performance, competitive advantage over low-cost
price, marketing and promotion. Besides foreign substitutes. Some public
Gillette, major competitors in blades and companies have indicated that they are
razors include Edgewell Personal Care experiencing continued pricing
Co. (Edgewell) through its ownership of pressures. If these pressures are not
Schick brands. mitigated by cost and expense reductions,
Basis of Competition lower profitability will jeopardize these networks or control them entirely
continued operators’ abilities to grow or maintain through downstream vertical integration.
market share. The growing presence of direct-to-
consumer (DTC) retailers in the blades
External competition and razors segment represent a growing
Industry operators compete with larger threat to industry operators. DTC
home centers, such as the Home Depot retailers capitalize on their divergence
Inc., and big box retailers such as from tradition brick-and-mortar sales
Walmart Inc. These major retailers techniques through their increased
individually account for a large convenience factor and image control, in
proportion of individual manufacturers’ addition to data collection for future
sales; as a result, the loss of business marketing initiatives. For example,
from one of these customers could have Edgewell, in May 2019, acquired Harry’s,
an adverse effect on the operations and a leader in DTC men’s grooming.
cash flows of some major companies. Diverging from Harry’s online-only roots,
Manufacturers in this industry compete Edgewell has recently made Harry’s
to retain strong relationships and accessible through big box retailers such
contracts with these retailers to ensure as Walmart and Target Corporation.
future success. To mitigate downstream Therefore, the growing focus on DTC and
supply chain risk and gain a potential retailing to large department stores has
competitive advantage, some companies increasingly siphoned away demand from
diversify their distribution and retail traditional industry operators.
Barriers to Entry There are few traditional barriers to

entry in the Hand Tool and Cutlery Barriers to Entry checklist
Level & Trend Manufacturing industry. No industry- Competition High

specific taxation laws exist, nor do Concentration Medium
arriers to Entry
B stringent government regulations or Life Cycle Stage Decline
in this industry are licensing requirements. However, there Capital Intensity Low
Mediumand S teady are several factors that may deter Technology Change Medium
companies from entry. Most Regulation and Policy Medium
importantly, price-based competition Industry Assistance Low
from less expensive imports has
increased the volume of foreign goods as SOURCE: WWW.IBISWORLD.COM
a share of domestic demand.

Additionally, the industry’s larger produce and distribute goods at lower
businesses, such as Stanley Black & costs than new, smaller entrants.
Decker Inc., Snap-On Inc. and the As a result, competing with
Procter & Gamble Company’s Gillette, established brands with high levels of
exhibit economies of scale that give brand loyalty is a significant barrier to
them an advantage. Their size and entry for new operators. Companies
resultant bargaining power over differentiate themselves largely
suppliers and distributors, and their on brand-based marketing. A
ability to produce in bulk, lower their consequence of competing against
production costs per unit. As a result, established companies is a relatively
these larger players are better able to high risk of default.
Industry The level of globalization within the revenue, while imports satisfy 56.2% of
Globalization Hand Tool and Cutlery Manufacturing domestic demand in 2019. High export
industry is high and increasing. While levels are driven largely by trade with
the level of foreign ownership of top US trading partners, Canada and
Level & Trend industry players is low, nearly all major Mexico, along with expansion into
lobalization
G in companies have manufacturing facilities emerging markets with high potential
this industry is abroad, excluding Snap-on Inc., which for growth. Imports are high and have
Highand the trend exclusively manufactures in the United increased mainly due to the more
States. The relocation of manufacturing cost-efficient manufacturing done in
is I ncreasing
operations to countries with lower labor developing countries, such as China,
costs is likely to continue among Taiwan and Mexico. Over the five years
industry operators over the coming to 2019, the share of imports achieved
years. Currently, exports are estimated by the top four foreign nations have
to account for 25.9% of industry remained relatively unchanged.
International trade is a Trade Globalization Going Global: Hand Tool & Cutlery
major determinant of Manufacturing 2002–2019
an industry’s level of
200 Export Global 200 Export Global
globalization.
Exports offer growth
opportunities for firms. 150 150
Exports/Revenue
Exports/Revenue
However there are legal,

economic and political risks 100 100
associated with dealing in
foreign countries. Hand Tool & Cutlery
Import competition can 50 Manufacturing 50 2019
bring a greater risk for 2002
companies as foreign 0 Local Import 0 Local Import
producers satisfy domestic 0 40 80 120 160 0 40 80 120 160
demand that local firms Imports/Domestic Demand Imports/Domestic Demand
would otherwise supply.
Major Companies
Stanley Black & Decker Inc. | Snap-on Inc.
The Procter & Gamble Company | Edgewell Personal Care Co. | Other Companies
Major Players Edgewell Personal Care Co. 5.0%

(Market Share) Snap-on Inc. 11.1%
64.7%
Other
The Procter & Gamble Company 8.0%

Stanley Black & Decker Inc. 11.2% SOURCE: WWW.IBISWORLD.COM
Player Performance Stanley Black & Decker Inc. (Stanley business segments: tools and storage,
Black & Decker) remains one of the industrial and security. The tools and
world’s leading power tool manufacturers storage segment, which is most relevant
Stanley Black & and is a major producer of the blades to the Hand Tool and Cutlery
Decker Inc. and bits for such equipment. Founded in Manufacturing industry, manufactures
Market Share: 11.2% 1843 by Frederick T. Stanley, the and markets hand tools (e.g. hammers,
company is a diversified worldwide planes, demolition tools, knives and
Industry Brand Names
producer and supplier of tools for blades), consumer mechanics tools (e.g.
Bostitch
professional, industrial, construction, wrenches and sockets), storage systems
DeWalt
do-it-yourself (DIY) and commercial (e.g. plastic tool boxes and storage units),
Husky
applications. Stanley Black & Decker pneumatic tools (e.g. nail guns, staplers,
Black & Decker
currently operates in 20 states across nails and staples used for construction,
Stanley
the United States and in 16 foreign remodeling, furniture making or other
Vidmar
countries, employing an estimated applications) and fasteners. Of these
Mac Tools
60,767 people globally. The company’s products, only metal tools and blades
Proto
overall revenue totaled $14.0 billion in generate industry-relevant revenue.
Blackhawk
2018 (latest data available). The company operates through many
The modern version of Stanley Black & well-known brands and subsidiaries,
Decker was formed in a 2010 merger including Bostitch, DeWalt, Mac Tools,
between Stanley Works and Black & Porter-Cable, Stanley, Black & Decker,
Decker. Stanley Black & Decker’s Vidmar and Proto. Stanley Black &
operations are split between three Decker has historically grown largely
Stanley Black & Decker Inc. (US industry-specific segment) - financial

performance*
Revenue Operating Income
Year* ($ million) (% change) ($ million) (% change)
2014 954.2 N/A 91.6 N/A
2015 1,007.7 5.6 103.8 13.3
2016 1,052.2 4.4 111.5 7.5
2017 1,134.0 7.8 133.8 20.0
2018 1,092.0 -3.7 79.7 -40.4
2019 1,132.1 3.7 83.7 4.9
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
Major Companies
Player Performance through acquisitions, particularly in the Pacific region and Eastern Europe. As
continued tools and storage segment with the $2.0 part of this strategy, the company has
billion acquisition of Newell Tools in acquired many companies throughout
March 2017 for $1.8 billion and the the world.
Craftsman brand acquired from Sears
Holdings Corporation for an estimated Financial performance
$900.0 million. Furthermore, the Over the five years to 2019, Stanley
company acquired the industrial business Black & Decker’s US industry-specific
of Nelson Fastener Systems from the revenue is forecast to grow at an
Doncasters Group Limited in April 2018, annualized rate of 3.5% to $1.1 billion.
adding 700 new employees and several After the merger of Stanley Works and
product lines to Stanley Black & Decker. Black & Decker, US industry-relevant
Additionally, Stanley Black & Decker revenue benefited from more expansive
acquired a 20.0% stake in MTD Holdings operations and rebounding consumer
Inc. in January 2019 for $234.0 million, demand along with gains in per capita
with the option to acquire the remaining disposable income and consumer
80.0% of the company after July 2021. confidence. Additionally, tool sales
The venture increases Stanley Black & were bolstered by the $2.0 billion
Decker’s global lawn and garden presence acquisition of Newell Tools and the
and introduces revenue and cost $900.0 million acquisition of the
optimization opportunities between the Craftsman brand in 2017. However, the
organizations. Stanley Black & Decker company has continued to expand into
has diversified in terms of geographic emerging markets and will likely
spread and channels of distribution, continue to relocate manufacturing
including a bolstered presence in the Asia facilities overseas.
Player Performance Snap-on Inc. (Snap-on) is headquartered service solutions for professional users.
in Kenosha, WI, where it was established Its products and services include hand
in 1920. The company is a global and power tools, tool storage products,
Snap-on Inc. manufacturer and marketer of tools, repair information equipment and
Market Share: 11.1% diagnostics, equipment, software and software, electronic parts catalogs,
Snap-on Inc. (US industry-specific segment)- financial performance*

Year* ($ million) (% change) ($ million) (% change)
2014 1,018.6 N/A 156.2 N/A
2015 1,098.1 7.8 179.2 14.7
2016 1,143.7 4.2 196.3 9.5
2017 1,137.6 -0.5 192.3 -2.0
2018 1,129.7 -0.7 184.9 -3.8
2019 1,124.2 -0.5 180.6 -2.3
*Estimates
Major Companies
Player Performance point-of-sale systems, warranty industries with productivity-enhancing

continued management systems and integrated tools, equipment, software and services.
systems for vehicle service shops. Snap- Additionally, the company has recently
on markets its products through made significant investments in emerging
multiple distribution channels in markets, and it will likely continue this
more than 130 countries. At the end of strategy in the near future. The company
January 2019, the company employed also grows through broadening the
12,600 people worldwide. The company’s distribution network of its mobile tool
largest markets are the United States, stores, which operate through company-
Canada, Europe and Asia-Pacific. Snap- owned vans that provide sales and
on’s company-wide revenue totaled $3.7 customer service.
billion in 2018 (latest data available).
Snap-on organizes its business into Financial performance
four reportable segments: the Over the five years to 2019, Snap-on’s
commercial and industrial group; the industry-specific revenue is forecast to
Snap-on tools group; the repair grow at an annualized rate of 2.0% to
systems and information group; and the $1.1 billion. Sales of Snap-on’s tool
financial services group. The company products have benefited from fairly stable
primarily operates in this industry demand for professional maintenance
through the Snap-on tools group and the and repair (M&R) work, which does not
commercial and industrial group. The decline as steeply as demand for most
Snap-on tools group accounts for the new products during periods of reduced
company’s largest source of revenue. consumer confidence and income
This segment manufactures hand tools because M&R is often considered a
such as wrenches, screwdrivers, sockets, money-saving alternative to new
pliers and ratchets. Industry-relevant products. Snap-on also employs RCI
revenue also stems from the group’s initiatives, which focus on eliminating
production of blades and bits for power waste and improving efficiently though
tools, including saws and cutting tools, product design cost reductions, improved
pruning tools and other cordless and automation processes and facility
corded equipment. consolidation. This initiative has
Snap-on’s growth strategy consists of especially benefited industry-relevant
diversifying its product lines to provide profit, which increased from 15.3% of
technicians in an expanding group of revenue in 2014 to 16.1% in 2019.
Player Performance Founded in Cincinnati in 1837 as a player within the Hand Tool and Cutlery
maker of candles and soaps, the Procter Manufacturing industry through the
& Gamble Company (P&G) has since manufacturing of razors for shaving.
The Procter & grown to become the world’s largest P&G operates worldwide and employs
Gamble Company branded consumer household and more than 97,000 people. P&G
Market Share: 8.0% personal product company. The generated a total of $67.7 billion in
company manufactures a range of revenue in fiscal 2019 (year-end June,
products across several categories, latest data available).
Gillette
including beauty and health, baby care Within the United States, P&G has
Braun
and home care. In 2005, P&G expanded five reportable segments: beauty;
its portfolio with the acquisition of the grooming; healthcare; fabric and home
Gillette Company and became a major care; and baby, feminine and family
Major Companies
Player Performance care. The net sales from the company’s Braun’s electric hair removal devices,
continued US operations account for an estimated such as electric razors and epilators,
42.2% of total revenue. The grooming account for an estimated 25.0% of the
segment, which includes industry- male shaving market and more than
relevant products, accounts for 9.0% of 50.0% of the female epilators market.
net sales. The segment’s products
include blades, razors, electric hair Financial performance
removal devices and face and shaving Over the five years to fiscal 2020, P&G’s
products made under the Braun, Fusion, US industry-specific revenue is forecast
Gillette and Mach3 brand names. to fall at an annualized rate of 1.7% to
P&G is the global leader in the sale of $812.0 million. The company has
blades and razors, and maintains a steadily moved US production facilities
leading market share in nearly all of the offshore during the five-year period and
countries in which it operates. The the total number of US manufacturing
company estimates that its blades and sites declined over the five years to fiscal
razors market share is nearly 60.0% 2020. Sales of P&G razor and shaving
globally, due to the strong penetration of products have declined over the five
Gillette brands, including Fusion, Mach3 years to fiscal 2020 due to an increased
and Venus. The segment’s electronic use of disposable razors, which have
hair removal devices and small home lower-than-average selling prices
appliances are sold under the Braun compared with other segment products.
brand in many markets across the world Declining sales figures have been
and compete with products made by partially offset by lower manufacturing
global and regional manufacturers. costs and increased pricing.
The Procter & Gamble Company (US industry-specific segment) -

financial performance*
Year** ($ million) (% change) ($ million) (% change)
2014-15 884.4 N/A 138.2 N/A
2015-16 897.9 1.5 182.3 31.9
2016-17 813.2 -9.4 172.1 -5.6
2017-18 835.4 2.7 167.0 -2.9
2018-19 761.4 -8.9 61.7 -63.0
2019-20 812.0 6.6 74.5 20.7
*Estimates; **Year-end June

Major Companies
Player Performance Formerly Energizer Holdings Inc. systems, disposable shave products and
(Energizer), Edgewell Personal Care shaving gels and creams. Edgewell’s main
Company (Edgewell) is one of the markets for its wet shave products are the
Edgewell Personal world’s largest manufacturers and United States, Canada, Japan, France,
Care Co. marketers of personal care products in United Kingdom and Germany. During
Market Share: 5.0% the wet shave, sun and skin care, the five-year period, Edgewell expanded
feminine care and infant care categories. its operations through a variety of
On July 1, 2015, Energizer completed the mergers and acquisitions. For example,
Schick
separation of its household products in March 2018, the company acquired
Skintimate
business into a separate publicly traded Jack Black, a men’s luxury skincare
Wilkinson Sword
company. Prior to the separation, the brand based in the United States. More
Personna
company was also one of the world’s recently, in May 2019, the company
leading manufacturers of batteries and completed a merger between a wholly
portable lighting. The new company has a owned subsidiary and Harry’s Inc.
portfolio of more than 25 brands and a (Harry’s) for $5.1 million. Harry’s is an
presence in more than 50 countries online retailer of men’s shaving and
worldwide. As of September 2019, the personal care products that may be
company employed 6,000 individuals purchased through a subscription service.
globally, including 2,200 based in the
United States. The company’s overall Financial performance
revenue totaled $2.1 billion in fiscal 2019 Over the five years to 2019, Edgewell’s
(year-end September). US industry-specific revenue is forecast
Edgewell organizes its business into to fall at an annualized rate of 4.6% to
four segments: wet shave; sun and skin $506.1 million. Sales of Edgewell razor
care; feminine care; and all other. products have declined over the past
Edgewell operates in this industry five years reflecting the intense
through its wet shave segment under the competitive environment. Consumers
Schick, Wilkinson Sword, Edge, have recently favored the use of
Skintimate, Shave Guard and Personna disposable razors over their reusable
brand names. The segment produces a counterparts, a central theme during
diverse range of products, such as razor the investment into Harry’s.
Edgewell Personal Care Co. (US industry-specific segment) - financial

performance*
Year** ($ million) (% change) ($ million) (% change)
2013-14 641.2 N/C 35.8 N/C
2014-15 583.3 -9.0 -110.5 -408.8
2015-16 569.0 -2.4 53.0 -147.9
2016-17 553.7 -2.7 12.7 -75.9
2017-18 538.3 -2.8 39.5 209.6
2018-19 506.1 -6.0 -92.3 -333.8
*Estimates; ** Year-End September

Major Companies
Other Company Founded in 2010 and headquartered in more than 30 manufacturing facilities
Performance Sparks, MD, Apex Tool Group (ATG) is a across the United States, Canada,
supplier of hand tools and power tools. Mexico, South America, Europe,
It was formed as a joint venture through Australia and Asia. The company serves
Apex Tool Group the merger of Cooper Tools (Cooper) the industrial, vehicle service and
Market Share: 4.3% and Danaher’s tools and components assembly, aerospace, electronics,
segment. Danaher and Cooper then sold construction and do-it-yourself markets.
ATG to Bain Capital in October 2012. In July 2014, ATG acquired Niagara
ATG manufactures hand tools, power Tools, a Canadian based tool
tools and electronic tools. In total, the manufacturer, and incorporated the
company includes more than 25 brands company into its power and professional
with more than 40,000 individual tools segment. ATG’s industry-specific
products and employs more than 8,000 revenue is expected to reach $437.4
people globally. The company operates million in 2019.
Other Company Klein Tools Inc. (Klein) has grown and Recently, Klein introduced screwdrivers
Performance advanced with the telecommunications made of proprietary steel that are
and electrical industries, for which it exceptionally durable and resistant to tip
produces specialty tools. The family damage. The company’s products are
Klein Tools Inc. operated business was established in sold at a variety of general and specialty
Market Share: 2.7% 1857 and is headquartered in retailers, as well as online, and the
Lincolnshire, IL. The company majority of Klein tools are made in the
manufactures more than 3,000 United States. Furthermore, in 2018,
products, including the well-known Klein acquired Ergodyne, a Minnesota-
lineman’s pliers. These combination based on-the-job safety products
pliers are used primarily by electricians company. Additionally, in February 2019,
and are often simply called Kleins. The Klein acquired the Wattmaster and Alco
company also produces virtually all other brands to enrich their range of specialty
types of hand tools used in construction, electrical tools. Klein’s industry-specific
electronics, mining and industrial revenue is estimated to reach $274.6
maintenance and repair (M&R). million in 2019.
Other Company Formerly known as Alcas Corporation, high-quality military, sporting and
Performance Cutco Corporation (Cutco) is the parent all-purpose utility knives; and Cutco
company of Cutco Cutlery, a large Kitchen, which are exclusive Cutco
manufacturer of high-quality kitchen retail stores.
Cutco Corporation cutlery and accessories in the United Cutco built its Olean, NY, plant in
Market Share: 2.0% States and Canada. The following 1949 to draw on the talents of knife-
companies share a parent corporation making craftsmen who had settled in the
with Cutco Cutlery: Vector Marketing region. Cutco’s method of distribution
Corporation, which is the exclusive has long focused on in-home
marketer of Cutco cutlery; Cutco at demonstrations, where consumers can
Home, which is a marketer of Cutco learn what type of steel makes the
products through in-home gatherings; sharpest knives, the importance of
KA-Bar Knives Inc., which manufactures handle design for comfort and control,
Major Companies
Other Company and how to select and use cutlery based manufactured at the company’s New
Performance on specific needs. However, products are York factory, adjacent to its expanded
now sold through a broadened headquarters. Currently, Cutco employs
continued
distribution network that includes over 600 individuals. Cutco’s revenue is
company-owned stores, mail order and estimated to reach $201.2 million
online. Cutco’s products are still in 2019.
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity The Hand Tool and Cutlery

Manufacturing industry’s level of capital Capital Intensity
Capital units per labor unit
intensity is low based on the ratio of
Level
depreciation to wages. IBISWorld 0.5
The levelof capital estimates that for every $1.00 spent on
intensity is L ow wages, industry operators spend $0.11 0.4
on capital equipment in 2019. This low 0.3

level of capital intensity reflects the
balanced need for both labor and 0.2
machinery. Companies require human 0.1

labor to finish many products and
perform tasks that cannot be automated. 0.0
Economy Manufacturing Hand Tool &
A dependence on unskilled human labor Cutlery
Manufacturing
gives a competitive advantage to Dotted line shows a high level of capital intensity
operators with manufacturing facilities SOURCE: WWW.IBISWORLD.COM
located in developing nations. Such

low-cost producers have a significant investments are made on machinery and
advantage in producing many lower equipment, while purchases of computer
end products, visible in the high hardware and software also represent
penetration of imports. Most capital significant costs.
Technology and As with most other metal manufacturers Machines and robots that can load and
Systems in the United States, operators in the unload metal onto molds, lathes and
Hand Tool and Cutlery Manufacturing computer numerical control (CNC)
Level industry are acting to offset high energy machines reduce the need for human
costs. Prompted by climbing electrical labor, making products less expensive to
The level
of rates and the pursuit of Leadership in produce. Companies also invest in
technology change Energy and Environmental Design increasingly advanced CNC machines
is M
edium (LEED) points, operators are increasingly that require reduced user input. As a
adopting new technologies that provide result, the industry’s technological
greater efficiencies in the use of energy. change is largely focused on
Older technologies, such as site-built gas maintaining a competitive cost
furnaces and older, less efficient structure by controlling manufacturing
commercial gas and electric resistance and operating expenses.
furnaces are inexpensive to build but While the technological advancements
costly to operate. These outdated may be minimal, the business strategy
technologies are being replaced with gas of many operators hinges on frequent
and electric furnaces that feature product introductions. This business
advanced, energy-efficient technologies strategy is especially prevalent among
and designs. The initial cost for this type razor producers, evident from the
of machinery is significantly higher than recent introduction of heated razors
previous technologies but will ultimately and complementary cartridges, though
save manufacturers money through both it is also common among other
energy conservation and compliance with companies that make consumer
environmental regulations. Furthermore, products such as hand tools for home
companies are investing in technologies mechanics and cookware. Stronger
that enable them to minimize waste from alloys are also regularly developed by
production processes. Increased operators that produce high-end tools,
efficiency in manufacturing processes particularly those for commercial
enable producers to achieve lower levels users. Innovative tool designs enable
of capital intensity and pass these savings increased productivity from end
to consumers. users and ultimately enable
Companies are also investing in organizations to achieve greater levels
equipment that increases automation. of customer satisfaction.
Revenue Volatility The Hand Tool and Cutlery exchange rate fluctuations. This industry
Manufacturing industry displays a is subject to increasing imports due to
medium level of revenue volatility. Over the ability of foreign countries to make
Level
the five years to 2019, industry revenue products at a lower cost. Import growth
The level
of volatility has fluctuated between a loss of 5.7% in has increased steadily over the five years
is M
edium 2016 and a gain of 3.5% in 2015. This to 2019. The industry’s consumer
industry is sensitive to changes in the staples, such as razor blades, suffered
price of key inputs, such as the price of minimal losses. Sales of tools and
steel, aluminum and electricity. cookware reacted more strongly to
Additionally, volatility in this industry changes in consumer confidence and
over the five years to 2019 stems from per capita income.
Revenue Volatility
continued
Regulation and Policy Manufacturing facilities within the Hand Additionally, industry operators may
Tool and Cutlery Manufacturing industry adhere to voluntary standards that are set
are subject to compliance with on both a national and international
Level & Trend environmental legislation and regulations level. Nationally, the American National
he level of
T affecting the discharge of waste. The Standards Institute provides product
Regulation is Clean Air Act requires compliance with specifications, and internationally, the
Mediumand the air-quality standards and empowers the International Standards Organization
Environmental Protection Agency (EPA) and ASTM International provide
trend is S
teady
to establish and enforce the limits on the standards. IBISWorld deems this
emission of pollutants. Among other industry’s regulatory levels to be
limits, the EPA establishes allowances for moderate and expects these conditions to
sulfur and nitrogen oxides and ozone continue over the next five years.
emissions. The Clean Water Act regulates Additionally, the current presidential
the discharge of pollutants into surface administration has prioritized the
water. The act establishes performance revitalization of US manufacturing-
standards on an industry-by-industry related industries by reconsidering and
basis, a discharge permit program and renegotiating trade agreements. In March
water quality standards. Any changes 2018, a 25.0% duty on steel and a 10.0%
made to environmental regulations by duty on aluminum were implemented
the current administration will likely and then expanded to include NAFTA
have an effect on industry operators. countries and the European Union in
Companies are also subject to a variety June 2018. As of May 2019, these duties
of nonenvironmental regulations. remain in place, except for the NAFTA
Included among these are occupational countries. These tariffs are anticipated to
health and safety, wage, overtime and boost the US industry, as demand and
other employment matters as dictated by therefore prices of US-made steel and
state and federal government agencies. aluminum are set to increase.
Industry Assistance The Hand Tool and Cutlery and base metals. Cutlery products incur
Manufacturing industry receives low- duties of between $0.01 and $0.09 per
level assistance, mainly through trade item plus up to 15.8% of the value of the
Level & Trend associations and tariffs on imports. The product for NTR countries and between
he level of
T American Knife Manufacturers $0.08 and $.020 per item plus up to
Industry Assistance Association, created in 2013 through the 45.0% of the value of the product for
is L owand the merger of the American Edged Products non-NTR countries. Hand tools,
Manufacturers Association and the including screwdrivers, hammers and
trend is S teady
Machine Knife Association, serves the US chisels imported from NTR countries are
edged products fabricating, subject to tariffs between 3.7% and 7.2%
manufacturing and marketing industry. while duties from non-NTR nations for
Its mission is to promote the exchange of similar products experience duties of up
ideas through its meetings, trade tours to 60% of the value of the product.
and exhibitions. Further, countries that Razors and razor blades originating in
lack normal trade relations (NTR) with NTR countries lack tariffs, but non-NTR
the United States experience a 27.5% nations must pay a duty of $0.010 each
duty rate on powder-actuated hand tools plus 30.0%.
Key Statistics
Industry Data Industry Number of
Revenue Value Added Establish- Exports Imports Wages Domestic households
($m) ($m) ments Enterprises Employment ($m) ($m) ($m) Demand (Mil)
2011 12,007.8 3,386.7 1,366 1,270 40,414 2,673.1 6,514.6 2,258.0 15,849.3 119.9
2012 11,091.6 2,968.0 1,200 1,108 35,226 2,983.7 8,133.7 1,936.5 16,241.6 121.1
2013 11,195.6 2,886.9 1,178 1,096 35,436 2,981.9 8,501.5 1,933.0 16,715.2 122.5
2014 10,791.6 2,950.7 1,191 1,115 34,970 3,047.0 8,717.1 1,922.3 16,461.7 123.2
2015 11,172.5 3,124.1 1,194 1,120 37,025 2,918.5 9,109.6 2,115.3 17,363.6 124.6
2016 10,540.2 3,209.6 1,165 1,057 36,303 2,686.3 8,898.6 2,064.6 16,752.5 125.8
2017 10,069.7 2,821.8 1,155 1,048 36,057 2,653.5 9,051.3 2,096.0 16,467.5 126.2
2018 10,041.9 2,917.2 1,136 1,030 35,814 2,738.4 9,536.8 2,083.6 16,840.3 127.6
2019 10,149.4 2,843.8 1,124 1,017 35,855 2,626.9 9,656.9 2,090.0 17,179.4 129.1
2020 10,166.9 2,937.6 1,118 1,011 35,878 2,635.2 9,661.1 2,091.8 17,192.8 130.6
2021 10,205.8 2,950.5 1,115 1,008 35,954 2,648.1 9,688.3 2,096.9 17,246.0 132.1
2022 10,243.8 2,916.6 1,111 1,003 36,035 2,666.3 9,696.5 2,102.3 17,274.0 133.6
2023 10,277.8 2,923.5 1,105 997 36,045 2,685.0 9,695.5 2,104.1 17,288.3 135.0
2024 10,383.2 2,950.0 1,105 995 36,256 2,720.9 9,767.3 2,118.3 17,429.6 136.4
2025 10,182.3 2,899.5 1,092 984 35,758 2,681.1 9,535.9 2,086.8 17,037.1 137.7
Sector Rank 134/193 111/193 79/193 74/193 102/193 82/184 54/184 98/193 116/184 N/A
Economy Rank 517/694 495/694 535/694 505/694 502/694 94/217 58/217 463/694 130/217 N/A
Annual Change Industry Establish- Domestic Number of

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand households
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2012 -7.6 -12.4 -12.2 -12.8 -12.8 11.6 24.9 -14.2 2.5 1.0
2013 0.9 -2.7 -1.8 -1.1 0.6 -0.1 4.5 -0.2 2.9 1.2
2014 -3.6 2.2 1.1 1.7 -1.3 2.2 2.5 -0.6 -1.5 0.6
2015 3.5 5.9 0.3 0.4 5.9 -4.2 4.5 10.0 5.5 1.1
2016 -5.7 2.7 -2.4 -5.6 -2.0 -8.0 -2.3 -2.4 -3.5 1.0
2017 -4.5 -12.1 -0.9 -0.9 -0.7 -1.2 1.7 1.5 -1.7 0.3
2018 -0.3 3.4 -1.6 -1.7 -0.7 3.2 5.4 -0.6 2.3 1.1
2019 1.1 -2.5 -1.1 -1.3 0.1 -4.1 1.3 0.3 2.0 1.2
2020 0.2 3.3 -0.5 -0.6 0.1 0.3 0.0 0.1 0.1 1.2
2021 0.4 0.4 -0.3 -0.3 0.2 0.5 0.3 0.2 0.3 1.1
2022 0.4 -1.1 -0.4 -0.5 0.2 0.7 0.1 0.3 0.2 1.1
2023 0.3 0.2 -0.5 -0.6 0.0 0.7 0.0 0.1 0.1 1.0
2024 1.0 0.9 0.0 -0.2 0.6 1.3 0.7 0.7 0.8 1.0
2025 -1.9 -1.7 -1.2 -1.1 -1.4 -1.5 -2.4 -1.5 -2.3 1.0
Sector Rank 133/193 17/193 150/193 148/193 145/193 137/184 88/184 143/193 115/184 N/A
Economy Rank 531/694 80/694 558/694 552/694 552/694 157/217 105/217 552/694 133/217 N/A
Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2011 28.20 41.10 22.26 297.12 18.80 29.59 55,871.73 0.02
2012 26.76 50.08 26.90 314.87 17.46 29.36 54,973.60 0.02
2013 25.79 50.86 26.63 315.94 17.27 30.08 54,549.05 0.02
2014 27.34 52.95 28.23 308.60 17.81 29.36 54,969.97 0.02
2015 27.96 52.46 26.12 301.76 18.93 31.01 57,131.67 0.02
2016 30.45 53.12 25.49 290.34 19.59 31.16 56,871.33 0.02
2017 28.02 54.96 26.35 279.27 20.81 31.22 58,130.18 0.02
2018 29.05 56.63 27.27 280.39 20.75 31.53 58,178.37 0.02
2019 28.02 56.21 25.88 283.07 20.59 31.90 58,290.34 0.01
2020 28.89 56.19 25.92 283.37 20.57 32.09 58,303.14 0.02
2021 28.91 56.18 25.95 283.86 20.55 32.25 58,321.74 0.01
2022 28.47 56.13 26.03 284.27 20.52 32.43 58,340.50 0.01
2023 28.44 56.08 26.12 285.14 20.47 32.62 58,374.25 0.01
2024 28.41 56.04 26.20 286.39 20.40 32.81 58,426.19 0.01
2025 28.48 55.97 26.33 284.76 20.49 32.75 58,358.97 0.01
Sector Rank 40/193 27/184 49/184 155/193 37/193 119/193 99/193 111/193
Economy Rank 360/694 31/217 58/217 362/694 287/694 177/694 283/694 495/694
Figures are in inflation-adjusted 2019 dollars. Rank refers to 2019 data. SOURCE: WWW.IBISWORLD.COM
Industry Financial Ratios

Apr 2017 - Mar 2018 by company revenue
Apr 2014 - Apr 2015 - Apr 2016 - Apr 2017 - Small Medium Large
Mar 2015 Mar 2016 Mar 2017 Mar 2018 (<$10m) ($10-50m) (>$50m)
Liquidity Ratios
Current Ratio 2.3 2.4 2.6 2.2 2.0 1.9 2.5
Quick Ratio 1.0 1.0 1.1 0.9 0.8 0.8 1.0
Sales / Receivables (Trade Receivables
Turnover) 9.1 8.9 9.0 9.2 11.2 8.2 7.8
Days’ Receivables 40.1 41.0 40.6 39.7 32.6 44.5 46.8
Cost of Sales / Inventory (Inventory Turnover) 3.6 3.3 3.5 3.2 3.2 3.2 3.7
Days’ Inventory 101.4 110.6 104.3 114.1 114.1 114.1 98.6
Cost of Sales / Payables (Payables Turnover) 14.4 14.7 15.1 12.3 14.4 9.5 13.8
Days’ Payables 25.3 24.8 24.2 29.7 25.3 38.4 26.4
Sales / Working Capital 5.5 5.2 5.2 5.0 6.7 5.0 4.3
Coverage Ratios
Earnings Before Interest & Taxes (EBIT) /
Interest 8.9 5.7 7.1 6.6 4.2 6.0 9.4
Net Profit + Dep., Depletion, Amort. / Current
Maturities LT Debt 2.4 4.3 4.3 4.1 n/a n/a 10.1
Leverage Ratios
Fixed Assets / Net Worth 0.5 0.4 0.5 0.5 0.4 0.4 0.5
Debt / Net Worth 1.1 1.0 1.1 1.0 1.0 1.0 1.2
Tangible Net Worth 39.2 43.3 40.7 35.5 34.9 32.8 38.7
Operating Ratios
Profit before Taxes / Net Worth, % 22.5 15.5 18.6 16.0 10.5 16.0 21.7
Profit before Taxes / Total Assets, % 8.9 6.5 9.6 6.1 5.1 6.0 7.6
Sales / Net Fixed Assets 10.9 9.6 9.3 9.6 12.3 16.2 6.2
Sales / Total Assets (Asset Turnover) 1.6 1.7 1.6 1.7 1.8 1.8 1.4
Cash Flow & Debt Service Ratios (% of sales)

Cash from Trading 29.6 33.7 33.1 32.5 34.0 32.2 31.5
Cash after Operations 7.6 7.0 9.6 5.8 8.0 5.8 4.7
Net Cash after Operations 7.4 6.6 9.4 5.8 8.3 5.4 5.1
Cash after Debt Amortization 1.8 2.9 3.4 1.6 2.9 n/a 3.1
Debt Service P&I Coverage 2.7 2.6 3.6 2.2 1.9 1.7 4.0
Interest Coverage (Operating Cash) 9.8 7.8 8.7 7.7 7.6 7.8 6.9
Assets, %
Cash & Equivalents 9.4 6.9 7.9 7.9 9.9 6.1 7.3
Trade Receivables (net) 21.3 20.2 20.3 20.0 18.3 23.4 18.7
Inventory 32.6 37.6 34.9 35.9 39.5 40.5 27.3
All Other Current Assets 1.4 1.7 1.7 2.1 1.3 1.5 3.7
Total Current Assets 64.7 66.4 64.9 65.9 69.1 71.4 57.0
Fixed Assets (net) 21.3 23.1 22.3 21.7 22.8 16.7 25.1
Intangibles (net) 7.0 4.3 5.3 5.6 1.8 6.2 9.3
All Other Non-Current Assets 7.0 6.2 7.6 6.8 6.3 5.6 8.6
Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Total Assets ($m) 2,968.7 2,729.3 2,404.3 3,224.1 87.2 415.6 2,721.3
Liabilities, %
Notes Payable-Short Term 6.6 8.0 8.8 7.8 8.7 13.0 2.0
Current Maturities L/T/D 4.4 4.8 2.7 3.0 5.3 1.5 1.6
Trade Payables 11.0 11.7 10.0 11.5 12.5 13.8 8.4
Income Taxes Payable 0.1 0.1 0.1 0.1 n/a 0.2 0.1
All Other Current Liabilities 9.6 7.3 6.1 9.7 7.6 9.4 12.4
Total Current Liabilities 31.7 31.8 27.8 32.2 34.1 38.0 24.5
Long Term Debt 13.0 13.4 16.6 15.8 22.0 6.2 17.6
Deferred Taxes 0.6 0.7 0.6 0.4 0.3 0.5 0.6
All Other Non-Current Liabilities 8.5 6.6 9.0 10.5 6.9 16.3 9.3
Net Worth 46.2 47.6 46.0 41.1 36.7 39.0 48.0
Total Liabilities & Net Worth ($m) 2,968.7 2,729.3 2,404.3 3,224.1 87.2 415.6 2,721.3
Maximum Number of Statements Used 101 91 79 83 31 25 27
Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more
than 260,000 statements of member financial institutions’ borrowers and prospects.
Note: For a full description of the ratios refer to the Key Statistics chapter online.
Jargon & Glossary
Industry Jargon CUTLERYAn edged or cutting tool that is generally used HANDSAWA saw used with one hand, which is
to cut, serve and eat food. operated by moving the arm backward and forward.
CUTTING TOOLSA hand tool used for cutting or
smoothing; the category includes saws, chisels, planes,
files and rasps.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that INDUSTRY REVENUEThe total sales of industry goods
new companies struggle to enter an industry, while low and services (exclusive of excise and sales tax); subsidies
barriers mean it is easy for new companies to enter an on production; all other operating income from outside
industry. the firm (such as commission income, repair and service
CAPITAL INTENSITYCompares the amount of money income, and rent, leasing and hiring income); and
spent on capital (plant, machinery and equipment) with capital work done by rental or lease. Receipts from
that spent on labor. IBISWorld uses the ratio of interest royalties, dividends and the sale of fixed
depreciation to wages as a proxy for capital intensity. tangible assets are excluded.
High capital intensity is more than $0.333 of capital to INDUSTRY VALUE ADDED (IVA)The market value of
$1 of labor; medium is $0.125 to $0.333 of capital to $1 goods and services produced by the industry minus the
of labor; low is less than $0.125 of capital for every $1 of cost of goods and services used in production. IVA is
labor. also described as the industry’s contribution to GDP, or
CONSTANT PRICESThe dollar figures in the Key profit plus wages and depreciation.
Statistics table, including forecasts, are adjusted for INTERNATIONAL TRADEThe level of international
inflation using the current year (i.e. year published) as trade is determined by ratios of exports to revenue and
the base year. This removes the impact of changes in imports to domestic demand. For exports/revenue: low is
the purchasing power of the dollar, leaving only the less than 5%, medium is 5% to 20%, and high is more
“real” growth or decline in industry metrics. The inflation than 20%. Imports/domestic demand: low is less than
adjustments in IBISWorld’s reports are made using the 5%, medium is 5% to 35%, and high is more than
US Bureau of Economic Analysis’ implicit GDP price 35%.
deflator. LIFE CYCLEAll industries go through periods of growth,
DOMESTIC DEMANDSpending on industry goods and maturity and decline. IBISWorld determines an
services within the United States, regardless of their industry’s life cycle by considering its growth rate
country of origin. It is derived by adding imports to (measured by IVA) compared with GDP; the growth rate
industry revenue, and then subtracting exports. of the number of establishments; the amount of change
EMPLOYMENTThe number of permanent, part-time, the industry’s products are undergoing; the rate of
temporary and seasonal employees, working proprietors, technological change; and the level of customer
partners, managers and executives within the industry. acceptance of industry products and services.
ENTERPRISEA division that is separately managed and NONEMPLOYING ESTABLISHMENTBusinesses with
keeps management accounts. Each enterprise consists no paid employment or payroll, also known as
of one or more establishments that are under common nonemployers. These are mostly set up by self-employed
ownership or control. individuals.
ESTABLISHMENTThe smallest type of accounting unit PROFITIBISWorld uses earnings before interest and tax
within an enterprise, an establishment is a single (EBIT) as an indicator of a company’s profitability. It is
physical location where business is conducted or where calculated as revenue minus expenses, excluding
services or industrial operations are performed. Multiple interest and tax.
establishments under common control make up an VOLATILITYThe level of volatility is determined by
enterprise. averaging the absolute change in revenue in each of the
EXPORTSTotal value of industry goods and services sold past five years. Volatility levels: very high is more than
by US companies to customers abroad. ±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
IMPORTSTotal value of industry goods and services
±3%.
brought in from foreign countries to be sold in the
United States. WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
INDUSTRY CONCENTRATIONAn indicator of the
included in this figure.
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
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WWW.IBISWORLD.

COM Hand Tool & Cutlery Manufacturing in the USDecember 2019 1

Cut deep: As imports satisfy rising consumer

IBISWorld Industry Report 33221

2 About this Industry 17 International Trade 33 Operating Conditions

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

About this Industry

Industry Definition This industry primarily manufactures also manufactures metal kitchen

Main Activities The primary activities of this industry are

The major products and services in this industry are

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About this Industry

Additional Resources For additional information on this industry

IBISWorld writes over 1000 US

Key Statistics Revenue Annual Growth 14–19 Annual Growth 19–24

$537.9m $2.6bn 1,017

5.0% Products and services segmentation (2019)

p. 26 Razor blades and razors

Industry Structure Life Cycle Stage Decline Regulation Level Medium

Key External Drivers Consumer spending increase in 2019, representing a potential

Consumer spending Number of households

Current The Hand Tool and Cutlery

pans and other cookware, mainly made

have continued to make inroads into the

Profit decreases This industry’s average profit margin has

Industry As a result of increasing construction,

Downstream demand Disposable income is projected to rise,

Products & Markets

Supply Chain KEY BUYING INDUSTRIES

KEY SELLING INDUSTRIES

Products & Markets

Products and Services Products and services segmentation (2019)

Products & Markets

Products & Markets

Major Markets Major market segmentation (2019)

The following market share segmentation Big-box retailers and home

Products & Markets

International Trade Exports

Level & Trend annualized rate of 2.9% to $2.6 billion

been growing for domestic manufacturers -3

US products. The top export destinations

Products & Markets

Exports To... Imports From...

Year: 2019 Total $2.6bn Total $9.7bn

Products & Markets

Business Locations 2019

West Establishments (%)

Products & Markets

Business Locations In general, manufacturing industries

establishments reflects the fact that the

Effective quality control Production of premium goods/services

Cost Structure Cost structure segments are broken down Purchases

Sector vs. Industry Costs

Basis of Competition Internal competition Some companies are perceived to be

Barriers to Entry There are few traditional barriers to

Level & Trend Manufacturing industry. No industry- Competition High

a share of domestic demand.

However there are legal,

COM Hand Tool & Cutlery Manufacturing in the USDecember 2019 1