The tool market is mature and has seen moderate growth rates, though 2014 proved to be a good year.
That's the conclusion of a new report from AMA Research, which says the value of the tool distribution market grew by 8% last year as a result of the improving economy and higher levels of construction and RMI activity.

AMA believes power tools account for a 50-55% share of the market and hand tools around 45-50%.

Hand tools is a mature, steady sector with few major changes in product development and sales are largely dependent on product replacements.

In contrast, demand for power tools has benefited from new products and product innovation that help to drive sales, such as lithium-ion battery and brushless motor tools.

Performance in the garden tools sector is heavily influenced by the weather, with 2014 a relatively good year, though performance in 2015 has been less buoyant.

AMA says distribution of tools used in construction, RMI and gardening is highly complex and fragmented, reflecting the number and ranges of products offered, as well as the range of different end-users and contractors.

Tool distribution comprises a mix of large national players competing with many regional and local companies, in both trade and consumer channels, but several major national and international groups hold significant shares in the tools market.

Digital technology is driving a change in buying behaviour in this sector, according to the report, with the internet and, in particular, the use of mobile devices among tradesmen, becoming increasingly important.

Whilst the internet-only channel is currently relatively small, its influence on distribution and sales is much wider. It has changed the way in which customers interact with suppliers: for example, there has been an increase in the use of click and collect that encourages people to visit stores, and leading to an increase in sales via trade counters.

Social media is also gaining in importance for both promotional messages and customer feedback, helping to grow direct sales.

AMA predicts that future prospects for the tools market are positive, with both domestic and non-domestic construction levels forecast to increase.

It says there will be a continued expansion of cordless product ranges and brushless motor products, with other product developments expected to stimulate market growth, including tools that are more ergonomically designed for employee welfare as well as increasing lifetime and efficiency.

The tool market is forecast to continue growing in 2015, with steady underlying growth of 3-4% per annum in the medium term, providing the construction and home improvement markets remain reasonably buoyant.