Industry Risk Ratings Synopsis

This Industry Risk Ratings report from IBISWorld evaluates the inherent risks associated with the Hand Tool & Cutlery Manufacturing in the US industry. Industry Risk is assumed to be 'the difficulty, or otherwise, of the business operating environment'.

The report looks at the operational risk associated with this industry. Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk).

This approach is new in that it analyses non-financial information surrounding each industry. Industries are scored on a 9-point scale, where 1 represents the lowest risk and 9 the highest. The Industry Risk score measures expected Industry Risk over the coming 12-18 months.

Industry Definition

Establishments in this industry (1) manufacture nonprecious and precious plated metal cutlery and flatware; (2) manufacture nonpowered hand and edge tools, (3) manufacture nonpowered handsaws; (4) manufacture saw blades; and (5) manufacture metal kitchen utensils and pots and pans.Cutlery and flatware products include barber's scissors, razor and knife blades, butcher knives, carving sets, fingernail and toenail clippers, table forks, hair clippers, plated metal cutlery, pocket knives, safety razor blades, nonelectric scissors, nonelectric shears, table spoons, swords and tailors scissors.Hand and edge tools include agricultural handtools, augurs, awls, axes, bearing puller, blow torches, carpenters tools, chisels, glass cutters, cutting dies, drill bits, woodworking edge tools, handheld files, fish wire, hammers, hatchets, lawn edges, measuring tools, and mechanics handtools.Saw blade and handsaw products include nonpowered handsaws and saw blades such as saw blades, chain saw blades, metal cutting saw blades, hand saws, stone cutting saws, and amongst others wood cutting saw blades.

Report Contents

Risk Overview

The Risk Overview chapter includes sections on Industry Definition and Activities, Industry Risk Score and Risk Rating Analysis. The Industry Definition and Activities section provides a detailed definition of the activities carried out by operators in this industry as defined in NAICS. A list of the primary activities of the industry is also included. The Industry Risk Score section provides the Overall Industry Risk Score as well as the Risk Scores for each of the three types of risk covered that combine to form the Overall Industry Risk Score. These three types of risk are Structural Risk, Growth Risk and External Sensitivity Risk. The Risk Rating Analysis section discusses the underlying factors contributing to the Overall Industry Risk Score.

Structural Risk

The Structural Risk chapter looks at risk arising from within the industry itself and provides a detailed discussion of the industry’s level of exposure to seven key indicators. These key indicators are Barriers to Entry, Competition, Industry Exports, Industry Imports, Level of Assistance, Life Cycle Stage and Volatility of Industry. The Overall Structural Risk Score is a weighted aggregation of these seven key indicators. Each of the key indicators is discussed in detail in this section.

Growth Risk

The Growth Risk chapter looks at risks arising from the expected future performance of the industry. The Overall Growth Risk Score is determined by amalgamating the scores for Recent Industry Growth and Forecast Industry Growth. Detailed analysis is provided discussing the reasons for the growth scores of both.

Sensitivity Risk

The Sensitivity Risk chapter looks at risks arising from forces (sensitivities) external to the industry. The Overall External Sensitivity Risk Score is determined by identifying the most significant (up to 6) external factors and weighting them to represent how significant each sensitivity is to the performance of the industry. Examples of External Sensitivities are Exchange Rates, Interest Rates, Commodity Prices and Government Regulations. There is also a detailed analysis of the affect each of the sensitivities has on the industry, including charts and data tables where appropriate.

Industry Risk and Industry Risk Scoring Methodology

This chapter provides an overview of how IBISWorld defines Industry Risk and discusses the methodology used to arrive at an Industry Risk Score. There is also a table that provides a definition of the seven levels of Industry Risk

This report was created for strategic planners, international marketing executives and export managers whose primary concern is the world market for interchangeable tools for hand tools or for machine-tools including dies for extruding metal. With the globalization of this market, managers can no longer be contented with a local view. Nor can managers be contented with out-of-date statistics that appear several years after the fact.

I have developed a methodology, based on macroeconomic and trade models, to estimate the market for interchangeable tools for hand tools or for machine-tools including dies for extruding metal for those firms serving the world via exports and foreign direct investment. It does so for the current year based on a variety of key historical indicators and econometric models.

This report was created for strategic planners, international executives and import/export managers who are concerned with the market for hand tools, pneumatic tools, tools with self-contained non-electric motors, and their parts. With the globalization of this market, managers can no longer be contented with a local view. Nor can managers be contented with out-of-date statistics that appear several years after the fact. I have developed a methodology, based on macroeconomic and trade models, to estimate the market for hand tools, pneumatic tools, tools with self-contained non-electric motors, and their parts for those countries serving the world market via exports or supplying from various countries via imports. I do so for the current year based on a variety of key historical indicators and econometric models.

On the demand side, exporters and strategic planners approaching the world market face a number of questions. Which countries are supplying hand tools, pneumatic tools, tools with self-contained non-electric motors, and their parts? What is the dollar value of these imports? How much do the imports of hand tools, pneumatic tools, tools with self-contained non-electric motors, and their parts vary from one country to another? Do exporters serving the world market have similar market shares across the importing countries? Which countries supply the most exports of hand tools, pneumatic tools, tools with self-contained non-electric motors, and their parts? Which countries are buying their exports? What is the value of these exports and which countries are the largest buyers?

Consumer attitudes towards gardening have changed significantly in recent years as the garden is increasingly becoming an extension of the living room. Living rooms and space are not only independently defined in terms of their four walls. Younger homeowners see the garden as an area of relaxation, and, spurred by gardening programs, are looking for products that enable them to acquire an "instant effect' for minimal effort. In this case, power tools, bedding plants, multipurpose lawncare products, and decking, have added in popularity.Generally speaking, gardens represent the unique taste of houseowners. Here, decorative elements contribute to transform a home environment into what it should be: a "paradise of well-being¡¨exquisitely devised by human hands. The second, the concept of "all-in-one" continues to dominate the market. In response to the "summer of the century", gardeners are aware of the importance of garden watering, in help of the use of corresponding rain water-collecting systems at the right time not only to make sure an optimal water supply for plants, but also function a smart money-saver solution. By this, more user-friendly systems with a high utility value are launched to meet the demand.The gardening designs focus on being purist-straight-lined, a delicate, dainty Bistro look, rustic colonial style or classic elegant. Consumers customer makes the decision to purchase based on the criteria of: seeing, sitting, feeling. And yet: an eccentric, exceptional design is an eye-catching feature, and already next year it might purely and simply be the best-seller. In this connection, trend-setting models enjoy equal status alongside traditional forms and styles and classic elegant design.Garden sheds aren't just for tools anymore. Now some custom-designed sheds are practically cozy enough to live in as more homeowners are looking for ways not only to beautify their landscaping, but increase property value, they are building garden sheds and other outbuildings to reflect their home designs.

The sales report shows sustained growth in lawnmower sector: riding-type lawnmowers up 4%; walk-behind lawnmowers rising 10% and gas walk-behind lawnmowers even jumping 12%. The lawnmower market is expected to grow in the coming years even in gloomy economic climate. Price has reduced to a less important factor than warranties and services. Recent trends also indicate a preference for comfort. Manufacturers and distributors are now emphasizing better seats with springs and armrests, and improved positioning of tools. There is more stringent regulation for defective products. Government requires the manufacturers for more product liability insurance covering consumer injuries. It is also worthy of notice that a new EC regulation intends to reduce the noise emitted by lawnmowers. It sets noise emission limits and establishes a method for measuring such emissions for all types of lawnmowers. EC regulations also require that testing be done in an EC-accredited laboratory.