US market expects growth in tools and fasteners

Despite signs of a slowdown, the US market expects growth in fasteners and tools. Georgia H Foley, Executive Director of STAFDA, provides us with local insight and marks Torque Magazine’s new membership of STAFDA…

STAFDA (Specialty Tools & Fasteners Distributors Association) is pleased to have Torque Magazine join our organisation! STAFDA has grown from a US-based association to an international one serving 2,500 companies in the construction and industrial channel. More than 35 different product categories are represented – from abrasives to power tools, threaded fasteners to generators – and everything in-between.

STAFDA was founded in 1976 by a diverse group of US distributors and that diversity continues today throughout our membership categories: wholesale distributors, manufacturers, independent rep agents, and affiliates (the trade press). Our collective members serve a number of channels within the residential and commercial construction/industrial sector, including electrical, rental, concrete, HVAC, welding, safety, infrastructure, and MRO just to name a few. STAFDA has over 65 different programmes and services it offers throughout the year, but the crown jewel is our Annual Convention & Trade Show.

Our upcoming 6-8 November meeting in Atlanta features exceptional educational programs, social events, and an 800-plus booth trade show. All our
product categories are represented under one roof and as a buying show, it allows distributors to take advantage of show-only specials, discounts, terms, and more. It’s a members-only show – no end users or retailers – and attendees are all company owners, upper management, and those who influence purchasing decisions. It’s a “can’t miss” event.

US tool and fastener market insight

The US construction industry has made a slow and steady rebound from the ‘Great Recession’ of 2007-2010. In 2015, construction in all sectors was moving at a fast pace, but STAFDA members have reported a slight slowdown. According to Dodge Data & Analytics, for the first six months of 2016, total construction starts on an unadjusted basis were $318 billion, down 11% from the same period a year ago. In the first half of 2015, there were 13
exceptionally large projects started at $1+ billion whereas from January-June 2016, only four projects got underway at that cost. The most impacted sectors are nonbuilding construction and nonresidential building.

Nonbuilding construction tumbled 22% YtD with public works down 15% and electric utilities/gas plants down 33%. Nonresidental building fell 19% YtD with commercial building down 7%, institutional building off 12%, and manufacturing an abysmal -70%. The bright spot continues to be residential construction with an 8% gain in single family housing.

In the fastener segment (nuts, bolts, screws, rivets, washers), Modern Distribution Management (MDM) reports 2016 sales are essentially flat, but expects the sector to end the year +1.9% due to positive pricing tied to domestic steel increases.

The power tool and hand tool markets are also important to STAFDA. The Freedonia Group expects US demand for power tools to expand 4% per year through 2020 to $7.2 billion, with domestic demand for hand tools to increase 1.7% per annum through 2020 to $5.8 billion.

The professional power tool market accounts for two thirds of all power tool sales. The predicted gains through 2020 will be driven by continued strength in building construction, ongoing increases in automotive aftermarket services, and repair spending.

The largest foreign suppliers of power tools to the US are China, Germany, Mexico, Taiwan, with China supplying more than half of the imports – power tools are sourced from Germany due to their reputation for quality.

Forecasted hand tool growth through 2020 will be attributed to steady gains in parts, attachments, handsaws, multitools, and precision measuring products. Advances that improve durability, usability, or ergonomics will further drive hand tool sales. Readers interested in learning more about STAFDA are encouraged to visit www.stafda.org

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