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Professional Portable Power Tools are a specialised sector of the overall portable power tool market. The market for professional portable power tools is highly competitive and concentrated, with an estimated value for 1999 of £71m at manufacturers' prices, a slight increase when compared with the previous year.

Over the past few years the market has exhibited a relatively low level of growth which is mainly attributed to general conditions in the construction and engineering manufacturing industry, automotive refinishing, etc.

UK Professional Portable Power Tool Market 1993-2003 at £m MSP

Source: AMA Research/Trade Estimates

The above chart illustrates the development of the professional portable power tool market between 1993 and 2000 with forecast annual sales up to 2003.

From the chart it can be seen that growth was more significant through the mid-to-late 1990s, reflecting the recovery from the recession of the early 1990s.

In addition, certain areas of construction demonstrated a steady improvement since 1997, and are likely to show marginal growth in the short to medium-term future. Whereas housing, retail development and the public sector have generally been relatively stable, commercial projects, utilities, railways and general infrastructure projects have shown more positive trends, with millennium-based projects also providing a significant stimulus to construction output.

However, the strength of Sterling has impacted adversely on manufacturing output, particularly in the engineering field, where trends to tighter tolerances, more precise casting and forging, and finer finishes are tending to reduce demand for professional power tools such as grinders, cutters, etc, used for stock removal.

Projected annual growth for professional portable power tools 1999 to 2003 has been conservatively forecast at around 2 percent, taking into account predictions for the construction and engineering manufacturing industry outlined above.

The three key sectors of the UK professional portable power tool market, according to our definition, are drilling and breaking (36 percent), cutting and grinding (44 percent), and carpentry & woodworking (20 percent). In overall terms, the largest market shares were achieved by Bosch, Makita and DeWalt (Black & Decker). Other major players include Partner, Stihl, Hilti, Hitachi, Atlas Copco, Ryobi, Stayer, etc.

The professional portable power tool industry is highly concentrated with over 85 percent of sales generated by six suppliers. There are only two manufacturing plants of professional power tool in the UK, namely Black & Decker and Makita. A substantial proportion of professional portable power tools are imported from Europe and the Far East.

Distribution of professional portable power tool products is served by a wide range of dealers and trade outlets. Power tool servicing dealers are the major distribution channel, followed by hire outlets.

Plant and Tool hire outlets represent a major distribution channel for professional portable power tool products. Throughout the UK there are an estimated 2500 to 3000 Plant Hire outlets, and 2000 Tool Hire outlets, with the respective markets growing at the estimated yearly rates of approximately 2.3 percent and 4 percent, with market leaders such as Hewden, A-Plant, HSS, Speedy, Finning, Initial Services, Andrews Sykes, Maxxiom and others etc.

Specialist distributors/wholesalers play a significant part in the distribution process, as do builders and plumbers merchants, and engineers merchants. Other channels include DIY multiples, electrical wholesalers, automotive outlets and 'direct' sales from the manufacturer etc.

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1	INTRODUCTION	6
2.	SUMMARY	7
3.	ECONOMIC ENVIRONMENT	9
3.1	GDP GROWTH	9
3.2	INTEREST RATES AND INFLATION	10
3.3	UNEMPLOYMENT	10
3.4	STERLING	10
4.	OVERVIEW OF THE PROFESSIONAL PORTABLE POWER TOOL MARKET	12
4.1	MARKET DEFINITION	12
4.2	MARKET SIZE	13
4.2.1	CURRENT SITUATION	14
4.2.2	FUTURE DEVELOPMENT	14
4.2.3	INTERNATIONAL TRADE IN PORTABLE POWER TOOLS	15
5.	PRODUCT SEGMENTATION	19
5.1	GENERAL	19
5.1.1	DRILLING & BREAKING	21
5.2.2	CUTTING AND GRINDING	23
5.2.3	CARPENTRY & WOODWORKING	26
6.	DISTRIBUTION CHANNELS	29
6.1	DISTRIBUTION CHANNELS FOR PROFESSIONAL PORTABLE POWER TOOLS	29
6.1.1	POWER TOOL SERVICING DEALERS	30
6.1.2	HIRE OUTLETS	31
6.1.3	SPECIALIST DISTRIBUTORS/WHOLESALERS	33
6.1.4	BUILDERS/PLUMBERS MERCHANTS	34
6.1.5	DIY MULTIPLES	35
6.1.6	ELECTRICAL WHOLESALERS	36
6.1.7	AUTOMOTIVE OUTLETS	37
6.1.8	ENGINEERS MERCHANTS	37
6.1.9	AGRICULTURAL AND MARINE	38
7.	MAJOR SUPPLIERS OF PROFESSIONAL PORTABLE POWER TOOLS	39
7.1	SUPPLY STRUCTURE	39
7.1.1	OVERALL MARKET SHARES FOR THE PROFESSIONAL SECTOR	39
7.2	MAJOR SUPPLIERS	40
8.	KEY MARKET INFLUENCES	45
8.1	CONSTRUCTION	45
8.2	GENERAL	47
8.2.1	INTEREST RATES & INFLATION	47
8.3	HOUSING	50
8.3.1	NEW HOUSE BUILD	50
8.3.2	HOUSE MOVING LEVELS	52
8.3.3	POPULATION PROFILE	53
8.3.4	EMPLOYMENT/UNEMPLOYMENT	55
8.4	INDUSTRIAL SECTORS	56
8.4.1	OUTPUT FROM THE ENGINEERING MANUFACTURING INDUSTRY	56
8.4.2	EXCHANGE RATE FLUCTUATIONS	58
8.4.3	AUTOMOTIVE PRODUCTION	59
8.4.4	WOODWORKING	60
8.4.5	THE AUTO-REFINISHING TRADE (INCLUDING CARS, BUSES, LORRIES, VANS)	62
9.	FUTURE PROSPECTS	63

Chart 1:	UK Professional Portable Power Tool Market 1993-2003 at £m MSP	7
Table 2:	The UK Professional Portable Power Tool Market 1993-2003 (£m MSP)	13
Table 3:	Imports & Exports of Selected Categories of Portable Power Tools for 1998 (£m)	16
Table 4:	Imports of Portable Power Tools into the UK by Product Category 1998 (£m)	17
Table 5:	Exports of Portable Power Tools to Trading Partners by Product Category 1998 (£m)	18
Chart 6:	Mixed Corded/Cordless Power Tools - Professional Sector 1998	19
Table 7:	Professional Portable Power Tools Market by segment 1998 at MSP	20
Chart 8:	Professional Portable Power Tools mix in the Drilling & Breaking sector 1998 by value	21
Chart 9:	Professional Portable Power Tools Mix in the Cutting & Grinding Sector by value 1998	23
Chart 10:	Professional Portable Power Tools mix in the Carpentry & Woodworking sector 1998 by value	26
Table 11:	Distribution Channels' Shares of Manufacturers' Sales of Professional Portable Power Tools ( percent) in 1998	29
Chart 12:	Market Shares of Leading Tool Hire Companies By Value 1997	31
Table 13:	Tool Hire Market 1997-2002 (£m)	32
Table 14:	Plant Hire Market 1998-2003 (£m)	33
Chart 15:	Merchants Market Shares	34
Chart 16:	DIY Multiples Market Share 1997	35
Chart 17:	Electrical Wholesale Market Shares 1998 By Value	36
Table 18:	Suppliers' Shares of Sales of Professional Portable Power Tools ( percent) in 1998	40
Table 19:	Contractors Output - New Work and RMI Non Housing - Current Prices (£m)	45
Table 20:	New Orders Obtained by Contractors 1990-1998 Current Prices (£m)	46
Chart 21:	Interest Rates and Inflation (RPI) from 1990-2000	48
Chart 22:	PDI & Savings Ratio	49
Table 23:	Housing Completions 1990-1998 Great Britain (‘000)	50
Table 24:	Housing Starts 1993-1999 Great Britain (‘000)	51
Table 25:	Value of New UK Housing Output and RMI Output (£m)	52
Table 26:	Number of Property Transactions in England and Wales 1990-1998	53
Chart 27:	Age Distribution of the Resident UK Population 1997 (‘000)	54
Chart 28:	Number of Employees in Employment GB - June 1981-98 (Millions)	55
Table 29:	Comparison of Engineering Sector Output By SIC Code (1990=100) 1996-2000	56
Table 30:	Comparison of Engineering Sector Output by SIC Code 1996-2000 (1990=100)	58
Table 31:	Exchange Rate Fluctuations 1994-1999 - DM, Dollars, and the ECU to the Pound Sterling, Spot Rates	59
Table 32:	The Production of Cars & Commercial Vehicles in the UK 1990-1998	60
Table 33:	The UK Woodworking Market £bn MSP 1995-1998	61

AM45099 AMA POWER TOOLS MARKET FEBRUARY 1999