Strong growth buoys Taiwan hand tool industry in Q1

Taiwan's hand tools industry reported strong performances in 2021 Q1, with export value reaching USD$1.114 billion, marking a 26.87% growth. Exports to the U.S. ranked the highest in terms of the destination country, around 38.21%, putting confidence in the region.

The Biden administration is continuing the China policy from the Trump era, which has been viewed to be generally favorable for Taiwanese companies. Organizations focusing on overseas trade shows are now encouraging exhibitors or visiting registration, especially the U.S.' biggest trade show in the industry: the National Hardware Show (NHS).

A look at the U.S. market, which accounts for 38% of Taiwan's hand tool exports, recent news data show that the U.S. mortgage interest rate is still at a historical low, reducing the cost of home purchases. At the same time, the real estate boom surpassed the previous peak in 2017, increasing demand for professional-grade tools. In addition, this year, with the pandemic easing up and increasing number of people receiving vaccine doses, the demand for home repairs has increased, prompting an uptick momentum for customer orders.

In 2020, global hand tool exports were affected by the first wave of the COVID-19 outbreak, resulting in a decline in the construction industry's operating rate. Export volume was only at US$32.061 billion, a decline of about 11.6% from 2019. Taiwan's hand tool industry exports in the first half of the year also showed an uncommonly-seen decrease.

However, since July, exports to the United States began to grow against the trend, while global exports turned positive since August. The annual export value reached USD$3.76 billion, only a slight decline of 0.95%, marking a strong bounceback. Industry experts report that the Taiwanese hand tool industry is still actively receiving orders, and the future business opportunities are promising.

Market research institution Ipsos' survey results indicate that the future American market will focus on six categories that would benefit the hand tools industry as a whole. Ranked from highest penetration rate to lowest: laptop computers, hardware hand tools, network cards/equipment, bicycles, automotive, and bicycle parts.