A quick look at the tool industry

A quick look at the tool industry

In common with manufacturers in all sectors across the UK, Torqueleader has had a roller coaster of a year. A host of risk factors which include global economic turbulence, currency fluctuations, oil and gas industry uncertainty and the migration situation combine to produce a less than ideal climate in which to operate.

In addition, the entire business world is undergoing rapid change in the way it performs, and firms must compete in this arena or wither away. Constantly advancing technology is forcing increasingly tight timescales on manufacturers as distributors and end users demand accelerated production cycles, more competitive pricing and shorter delivery times.

In an Industry Week article last month, Patricia Panchak wrote 'everywhere, it seems, anyone interested in manufacturing is talking about the Internet of Things, the cloud, data analytics and a host of other technologies that herald a new industrial revolution.' (1) Pundits worldwide are talking about a renewed focus on science and engineering which enables manufacturers to develop a highly skilled and technology-friendly workforce. Exactly how the manufacturing industry sells to its customers is also undergoing a radical rethink, with an increasing emphasis on using social media to buy and sell and to communicate at every level.

Communication about the importance of our industry is also essential. Torqueleader makes state of the art precision-engineered torque tools which are then used by companies all over the world to ensure that equal precision is applied to their own products. Outside the industry however, a vast number of people across the world have little or no idea of the value of correctly applied torque or how it impacts on them. If you work in the torque tool industry, how often have you had a blank look from someone if you've mentioned it at a party? Yet without it, the cars, trains and planes they travel in, the power which heats their homes and lights their offices, the technology which enables them to communicate and almost every aspect of their lives would be impossible. Correctly applied torque keeps the world safe and operational.

The market for torque tools has always been a steady but slow growing industry. In many ways this enables it to ride out the peaks and troughs but it also means thorough long term strategic business planning. We have found this to be particularly true in 2015 where our practical and careful capital investment programme in both people and machines has paid off with increased production at a manageable rate. One issue that we and all tool manufacturers face is summed up succinctly by AMA Research in a recent report; ‘market growth may be restricted by the fact that hand tools are limited by their inherently simple design that allows for only modest improvements and pricing increases, and their durability which restricts replacement sales. Developments in power tools are also increasing product life and, thereby lengthening replacement frequencies.’ (2) In other words, we need to be constantly investigating new market areas, because our commitment to improving the quality of our tools continuously means that customers will buy fewer of them!

In addition, tool manufacturers need to keep their feet firmly on the ground in terms of what customers really want. For example, an internal chip in a tool which can communicate information directly wherever you need it to go may seem revolutionary, but customers won’t buy it if it takes longer to make and costs more than one without one without exponentially greater benefit.

However, the global torque sensor market, in which we have a leading position with our highly accurate and popular Capture system, is one which we feel will grow dramatically over the next few years. Torque sensors are rapidly evolving electronic calibration analysers which have the potential to revolutionise the way industries measure their torque, and we have seen a rising demand for the absolute accuracy with which they measure. For example, carbon fibre is increasingly used for the manufacture of cars, aeroplanes and, with the explosion in the popularity of cycling, high tech bikes. Without absolute accuracy of torque, carbon fibre can crack and cause multiple manufacturing and safety issues.

According to the Persistence Market Research blog, ‘Major factors contributing to the growth of the global torque sensors market include the introduction of electric vehicles and the emergence of new technologies such as surface acoustic wave (SAW) and optical torque sensors. These type of sensors hold momentous importance in applications including pump testing, turbine testing, engine and transmission testing and measurement of power within propulsion systems, among others’. (3) We will be concentrating our research and development next year into ensuring that we keep ahead of this demand.

At the close of its 50th anniversary year, Mountz Inc, torque tool manufacturer and our U.S. distributor, has seen 'an exceptional year with growth exceeding plan' according to President and CEO Brad Mountz, who adds 'but there is reason to be cautious when looking forward. Domestic (North America) regression in indices used to predict industrial market expansion or contraction have been in decline for 6-8 months. While orders remain strong there is reason to believe 2016 may not continue on the same robust trajectory. While we prepare for a slight downward economic environment, Mountz will bolster its marketing and product development efforts to ensure future growth, while making cutbacks to non essential business expenses.  Keeping our eye on the overall business trend is critical to optimising our return on investment.'

Torqueleader Managing Director, Kieron Smith, says ‘2015 has seen growth in both our UK and export markets in spite of the well-documented economic challenges. We are predicting growth of 8% during the year, which is a significant amount when these challenges are taken into consideration, and means that we are able to end the year on a positive note. The export market is currently our strongest as the UK market remains turbulent due to many factors, including changes in MOD contracts and uncertainties in the oil and gas industries.’

As the industry faces a new year of unprecedented challenge and change, we’re confident that we’ll remain at the forefront of torque tool manufacture.

(1) Patricia Panchak ‘Manufacturing’s Digital Future’ Industry Week 24/11/15
(2) AMA Research ‘ Tool Distribution Market Report – UK 2015-2019 Distribution Report’ 3rd edition
(3) Persistence Market Research ‘Torque Sensors Market: Global Industry Analysis and Forecast 2015-2021’

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