Every time we watch the news, we hear about inflation and how it is affecting American consumers. The power tool market is not immune to this troubling trend. If rising food and gas prices weren’t already enough, we’re starting to see price hikes in every sector of the US economy. This means that we are also paying more for tools and power equipment. What is causing price increases and how will affect us in the months to come? Top Power Tools investigates.
Prices for more than 700 Makita tools went up in April. In November last year, Stanley Black & Decker also increased their prices. This is quite a knock for tool buyers as the company owns many popular tool brands, including DeWalt. This will have a knock-on effect throughout the economy as manufacturers and contractors will be paying more for the tools they use. In the end, we, the consumers will be paying for this.
I guess the war in Ukraine, and its impact on the supply of oil can be blamed for some of the difficulties, but this is (hopefully) a short-term crisis. We all hope and believe that Putin will come to his senses or Ukraine and her allies will emerge victorious in this senseless cray war. Not only will be peace in Ukraine be a great blessing, the world economy might be able to breathe a sigh of relief as gas prices return to normal. Though none of us know what the future holds. This war might go on for a long time and could affect other European countries.
While the price of gas has affected every one of us in some way, it is not the sole cause of inflation and the effect it has on the rising price of power tools. The dollar has been tumbling downward for some time. This is mostly a result of massive government spending. COVID relief and President Biden’s big spender attitude toward infrastructure build programs have caused the dollar to plummet. About $700 billion in aid to Ukraine has also knocked the dollar down a few notches. This means that all our imports are more expensive than they were a few years ago. The dollar price for all those goods coming in from China is rising constantly, and we’re paying for it.
According to an article published on the Bloomberg website in October last year, there are multiple factors that influenced the Stanley Black & Decker tool price increase. Between July and November 2021, the price of raw materials increased dramatically. This has cost the Stanley Black & Decker group $690 million in just a few months.
Since cordless tools have come to dominate the market, battery prices are a big factor in what we pay for these tools. Lithium and cobalt (essential in the production of lithium-ion batteries) are rocketing at an astounding rate. Looking at the lithium price increase over the past year, it is almost unbelievable. In May 2021, the price of lithium was $13/kg. By February 2022, it had increased to a whopping $40. That’s around a 300% price increase in less than a year.
Although many of us feel that the COVID pandemic is basically over, and things are returning to normal, the economy seems to feel otherwise. With new, almost draconian lockdown regulations in China, supply chains are once again being disrupted. The pandemic has had a massive impact on shipping and storage costs. Goods are having to be stored for long periods and the demand for shipping surges as soon as restrictions are lifted. A shipping container costs about 7-times more than it did in early 2021. Shipping goods from Asia to North America also takes more than twice as long as it did a year ago.
There seems to be a sense of doom and gloom about the economy in general. We can only hope that all this COVID mania will eventually come to an end. Are we going to be in partial lockdown for the rest of time? Let’s hope not. With a bit of luck, things will return to normal sooner rather than later. By this, I’m referring to the effects of both COVID and the Russia/Ukraine war.
Unfortunately, once prices go up, they seldom come down. The higher prices for power tools are something we’re just going to have to deal with. Even as the world returns to normal, we won’t see the US economy recovering overnight. Inflation has a nasty way of lingering long after the apparent causes seem to have dissipated.
At the risk of sounding too pessimistic, I’m guessing that inflation in the power tool market is going to be around for some time, possibly several years. All we can hope for is a slower increase in prices than what we’re experiencing at the moment.
If you’ve been thinking about buying a drill, or any type of power tool for that matter, and feel that the price is too high, don’t hold out in the hope that prices will drop. In all likelihood, power tool prices are only going to go up. You may as well bite the bullet and buy it now. Next year, it is probably going to cost even more. Demand for raw materials is only going in one direction and that is up. This means that all the products we buy can only increase in price, regardless of what happens to the dollar, COVID, or the price of gas.