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The global demand for power tools rose from $19.0 billion in 1999 to $22.8 billion by 2004 and is expected to increase to $29.2 billion in 2009. The annual rate of growth was 3.7 percent during 1999-2004; the projected rate during 2004-2009 is 5.0 percent. This reflects accelerating growth in developing regions, with the most promising opportunities occurring in Latin America, Africa/Mid-East, and Asia-Pacific. Electric tools (plug-in and cordless) dominate world demand, comprising three-fourth of shipments in 2004. Commercial users accounted for 70 percent and households for 30 percent of total sales, a ratio that should prevail during the coming years. North America accounted for 40 percent of total demand but for only 30 percent of production, as U.S. firms shifted operations to countries with lower wages. While hundreds of companies offer power tools, only a few firms hold significant market share. The leaders are Black & Decker (United States), Bosch (Germany), TechTronic (HongKong), Makita (Japan), and Hitachi (Japan); together they accounted for 37 percent of global sales in 2004.
Tools and tool-making have been around since the dawn of civilization but power tools for less than a century. Indeed, they got their impetus only after World War II, with reconstruction efforts and do-ityourself homemakers leading the way. Today, there is a vast array of power tools (drills, saws, sanders, grinders, hammers, wrenches, etc.) along with a vast variety of accessories and parts. (This paper and the report on which it is based exclude hand tools and machine tools.) Power tools are used in a broad array of commercial or industrial applications. The most significant ones are construction and remodeling, motor vehicle repair, and production of industrial machinery. In addition, power tools are used widely in a myriad of consumer-related settings (i.e., in household tasks of all kinds). The scope of usage is so broad and diverse that aggregate macroeconomic outlook and pros-pects for gross fixed investment within a country are the fundamental determinants of power tool demand.
When looking at power tool markets and suppliers on a global basis, a distinction has been drawn in the past between industrialized nations and developing countries. The former comprise the large, mature, and highly cyclical markets of North America, Western Europe, and Japan, with most of...