Over the past year, power tool sales have been sluggish in the U.S, in light of a softer construction market, inflation and high costs of raw materials, and other factors.
This is a product category that’s experienced significant evolution over the past several years with the advent of new technologies and shifting customer preferences. Enhanced battery technology alone has transformed the production and distribution of power tools.
Even with a slightly more optimistic outlook in the forecast, brands must be aggressive about research and development to produce innovative power tools, features, and accessories that address shifting customer preferences, as well as new safety and environmental regulations and standards for this product category.
What is the Market Forecast for Power Tools?
Power tools are used in a variety of industries in addition to home construction, remodeling and landscaping, such as the aerospace, automotive, and oil and gas industries.
In their September 2024 Size of Market Report, the Home Improvement Research Institute (HIRI) gives further insight into projections for power tool sales, which are tied to growth rates in the tools product category as a whole. After several consecutive years of growth, power tool sales are projected to decline by 1.3% in 2024, affecting both the professional and consumer market segments. The market then is expected to recover in 2025, demonstrating an average 2.8% growth rate from 2026 to 2028.
Since 2015, the professional market for power tools, equipment, and accessories has outpaced the consumer market in terms of growth, based on research from HIRI. For example, the pro market has expanded from roughly $4.5 billion in 2015 to a projected $9.8 billion by 2028, while the consumer market was valued at $5.7 billion in 2015, with a projected estimate of $8 billion in 2028.
According to data from Fortune Business Insights, the global power tools market size is forecasted to grow to $36.82 billion by 2030. The Asia-Pacific region is currently dominating the power tools industry, consuming a global market share of roughly 35% in 2022. The top players in the power tools market include Robert Bosch GmbH, Makita Corporation, Stanley, Black & Decker Inc., and Hilti Corporation.
There are several market categories for power tools, based on mode of operation, but the electric segment—composed of both cordless and corded tools—is the most dominant, and will remain so in the near future. Hydraulic power tools also are projected to experience some growth over the next couple of years.
Trends and Innovations in the Power Tools Industry
With signs of growth on the horizon for the power tools industry—which includes outdoor power equipment (OPE)—it’s important to get a sense of what factors are influencing the market, internally and externally.
Here is an overview of some current trends and innovations for power tools that are likely to have a residual impact on product sales and industry developments in the coming years:
1. Construction Expansion as a Key Driver of Growth
The expansion of the residential and commercial construction industries are key to driving growth in the power tools market on a global scale. As the construction industry grows, so will the demand for power tools. It also will influence the type of products developed, as construction professionals value products that are suitable for various applications.
Construction activity in the U.S. is growing at a less rapid pace when compared to other world regions—such as Asia Pacific, the Middle East, and Africa, where there is more opportunity for urbanization and investment into infrastructure. However, there continues to be steady demand for power tools from both DIY homeowners and professional contractors in the U.S.
2. The Impact of Cordless Power Equipment
One of the biggest influences on the power tool industry over the past several years is the adoption and proliferation of cordless power equipment, thanks to advances in battery technology and material science. During this time, we’ve seen purchases of cordless/battery-operated screwdrivers, saws, and combo kits increase. Not to mention the rapid growth of battery-powered OPE among the consumer market over the last decade.
Power source tends to be an important feature in terms of customer preference and what they look for in power tools and equipment. There is increasing demand for lightweight, compact tools that are easy to store and transport to different job sites, yet don’t compromise on power, which has historically been a missed mark, especially among Pros. Pros are open to the benefits of cordless technology, which allows for a wider variety of uses, but in many cases are waiting for manufacturers to deliver a high quality product that fits the bill. To make cordless power tools even more appealing and functional, manufacturing brands should continue researching and implementing new technologies that increase battery run time and exceed power of their non-battery rivals.
For example, Robert Bosch GmbH introduced improvements to its cult screwdriver, the Ixo Classic, including a 30% shorter charging time. This type of feature enhances the functionality of the product by decreasing its downtime and increasing comparable value.
3. Dealing with High Costs of Materials and Maintenance
Market volatility related to raw materials is a challenge for manufacturers. Common materials used for production of power tools—including aluminum, steel, and semiconductor chips—are affected by continuous price fluctuations on the global market.
Additionally, new technologies often come with complexities that are associated with higher maintenance costs. Keeping up with ongoing maintenance, as well as fixing or replacing parts on power tools, can be more challenging and costly for consumers, which also impacts manufacturers and retailers and what is being expected of them. Addressing and mitigating these challenges is an opportunity for power tool companies to maintain brand loyalty and market share.
4. Home Centers Remain the Go-to Supplier
Home centers are the most used supplier for power tools and accessories, according to findings in the Product Purchase Tracking Study from HIRI. In-store purchases account for over two-thirds of transactions, with online purchases making up most of the remainder. Typically, consumers are purchasing power tools with the intention of doing a planned repair, replacement, or addition to their home. Emergency projects are significantly less common when it comes to purchaser motivation, or the product’s intended use.
The Farnsworth Group Independent Retailer Index, produced in partnership with the North American Hardware and Paint Association (NHPA), provides a deeper look at how independent channels are performing each quarter. The results for Q2 of 2024, which apply to total product sales, corroborate what we’ve observed in the power tools market specifically.
5. Millennial and Boomer DIYers are Significant Buying Groups
Research from HIRI also found that Millennials and Baby Boomers are the top two age groups driving sales for power tools, accounting for about two-thirds of purchasers. Gen X, which is a notably smaller cohort, contributes another 25%.
This is important when considering how to target these DIY segments. Featuring power tools in tutorials and how-to videos empowers prospective and existing customers with knowledge and confidence, especially since these products can be more intimidating for DIY homeowners. Websites also should contain targeted messaging and extensive product information, as nearly 90% of buyers do “extensive” or at least “some” research purchasing a power tool. With inflation and rising cost of living affecting most demographics, it’s also crucial to articulate the long-term value of a product, not just race to the bottom for lowest price offerings.
6. Seasonality Impacts Outdoor Power Equipment Purchases
According to data from HIRI’s Product Purchase Tracking Study: Lawn and Garden, seasonality and weather both play a big role in when OPE is purchased by individual consumers and when their projects get underway. Perhaps not surprisingly, a majority of purchases for power tools used for outdoor landscaping and improvement projects take place during the second quarter of the year, as many homeowners are preparing for projects that take place in late spring and early summer.
7. Sustainability and Safety Influence the Power Tools Market
Sustainability and safety are two components that play a major role in the power tools industry. There’s a shift among customers toward more sustainable brands and those with a commitment to environmental responsibility, which is why top players like Robert Bosch—along with other companies such as Techtronic Industries Co. and Atlas Copco AB—are investing in innovative technologies and energy-efficient power tools.
There’s also regulatory compliance and safety standards to take into consideration, such as UL certification, which signifies that a product meets local and federal safety and environmental regulations. While lithium-ion batteries have revolutionized the market for cordless power tools, we’ve observed regulatory agencies rolling out new standards and requirements, and this is likely to continue.
For example, the European Union (EU) is in the process of adopting minimum values for electrochemical performance and durability parameters by 2027. In China, welding machines for professional use are required to have an energy efficiency label, as of June 2024, with a two-year transition period. Another example is the proposed rule for Active Injury Mitigation (AIM), which would require finger detection technology in table saws within three years.
8. Demand for Innovative Power Tools
Looking ahead, power tools brands must be prepared to contend with shifting dynamics within the market and evolving customer behaviors. This includes developing and implementing innovative battery systems, multi-purpose products and machines, and additional accessories to establish a solid foundation for future growth.
These are the kinds of advancements we’ve seen made by top power tools brands over the past few years. Some of Makita’s notable product developments include the advanced XGT 40VMax machines for outdoor use and an advanced 18 Gauge 2” Brad Nailer that features better ergonomics.
In 2018, Robert Bosch, in partnership with Triax Technologies, developed a tracking device that enabled construction firms and professionals to locate equipment and tools while also monitoring how they’re utilized at job sites and safety data.
Brands that continue to develop innovative products to meet the demand from consumers will be in a better position to deal with market volatility and other challenges that influence the power tools industry. That's where we can help.
Researching Customer Usage and Attitudes Toward Power Tools
Our market research experts at The Farnsworth Group will provide you with customized qualitative and quantitative research that is tailored to your company and your market segment, and that yields more than just numbers. With a variety of internal and external factors affecting the power tools market, it’s important to delve deeper into what, where, and why your target customers make their purchases to know which strategic initiatives to prioritize in the year ahead.
