Hardware, NEC

SIC 3429

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing miscellaneous metal products usually termed hardware, not elsewhere classified. Establishments primarily engaged in manufacturing nuts and bolts are classified in SIC 3452: Bolts, Nuts, Screws, Rivets, and Washers; those manufacturing nails and spikes are classified in the major group for primary metal industries; those manufacturing cutlery are classified in SIC 3421: Cutlery; those manufacturing hand tools are classified in SIC 3423: Hand and Edge Tools, Except Machine Tools and Handsaws; and those manufacturing pole line and transmission hardware are classified in SIC 3640: Electric Lighting and Wiring Equipment.

This industry manufactures a diverse range of products, including brackets, clamps, couplings, door locks, fireplace equipment, handcuffs, nut crackers, and piano hardware. Valued at $18.2 billion in 2008, the industry's more than 2,350 establishments employed nearly 54,000 people.

Traditionally, production in this industry was centered in the New England area. Many small blacksmith shops produced simple but useful household items made of low-grade iron and steel, known as "Yankee notions." The availability of rail and ship transport allowed rapid distribution along the eastern seaboard and the central United States. The shift to mass production techniques and away from a reliance on skilled craftsman, however, resulted in the migration of the industry to the Midwest. The industry tended to follow the source of inexpensive materials and markets, differentiating it from cutlery by its marked westward migration. The industry adapted its production methods to the use of numerical control production (NC) with great success in productivity as well as precision.

Both employment and sales in the industry increased steadily throughout the 1980s, but declined substantially concurrently with the general economic downturn near the end of the decade. The industry was particularly hurt by the soft housing market, since businesses in that sector use a substantial amount of hardware. By the early 1990s, the hardware industry showed signs of recovery, and once-dismal unemployment figures showed signs of improvement. The strength of the economy boosted industry performance in the late 1990s. Poor sales in the early years of the first decade of the 2000s, which were attributed to a weak U.S. economy, began to show marginal improvement by 2004.

In 2004, the U.S. Census Bureau reported that industry shipments reached nearly $43.8 billion, a slight increase over the 2002 figure of $43.1 billion. Employment between 2002 and 2004 declined from 195,015 to 175,125, despite increased shipments, largely due to increased automation. Of these employees, 126,508 in 2004 were production workers, putting in 265 million hours to earn total wages of nearly $4.5 billion.

According to industry statistics, there were an estimated 2,359 establishments engaged in manufacturing miscellaneous metal products with shipments valued at more than $18.2 billion in 2008 and industry-wide employment of 53,990 workers. Industry shipments and employment numbers fell dramatically from 2004 levels of $43.8 billion and 175,125, respectively. States with the highest concentration in the industry were California and Florida, with nearly 25 percent of market share.

In terms of market share, manufacturers of locks or lock sets captured 15.3 percent of market share with shipments of $316.5 million in 2008. While the majority of the industry was highly fragmented, manufacturers engaged in marine hardware constituted 8.7 percent of market share and $328.9 million in shipped products also in 2008. In terms of sales, other significant sectors during this time were manufacturers of fireplace equipment and hardware, such as andirons, grates, and screens, and manufacturers of furniture hardware.

In 2008, other important sectors included aircraft hardware; metal fasteners; builders' hardware; motor vehicle hardware; cabinet hardware; furniture, builders', and other household hardware; keys, locks, and related hardware; door opening and closing devices, except electrical; metal pulleys; and metal clamps.

Despite challenging global market conditions, Ingersoll-Rand Co., with 60,000 employees, posted revenues of $13.2 billion in 2008. The company acquired Trane Inc. for an estimated $10 billion in 2008. Trane Inc. had posted $2.5 billion in 2008 with 29,000 employees. Fortune Brands had revenues of $7.6 billion in 2008 and 27,100 employees.

For 2010, the total number of establishments fell to 1,949 from the estimated 2,359 reported in 2008. Shipment values plummeted from more than $18.2 billion in 2008 to $12.7 billion in 2011, and the total number of workers dropped from 53,990 in 2008 to 47,402 workers in 2010. On average, each establishment employed 25 workers generating roughly $7.3 million in sales. The hardware, not elsewhere classified, sector had 506 firms accounting for 26 percent of industry share with shipments totaling nearly $8.7 billion and 11,401 workers in 2010. While market share for manufacturers of locks or lock sets fell from 15.3 percent in 2008 to 8.8 percent in 2010, shipment values grew from $316.15 million to $627.9 million in the same period.

The economic recession at the end of the first decade of the 2000s caused a decline in the total number of hardware manufacturers and a decrease of 6,588 workers from 2008 and 2010. The industry "was one of the hardest hit," according to "Builders's and Cabinet Hardware: A U.S. Market Report," a market report by Global Industry Analysts, Inc. (GIA) released in January 2011. With the economy showing signs of beginning a slow recovery, GIA projected that demand for builders' and cabinet hardware would reach $4.2 billion by 2015. Locks and other safety devices were predicted to account for the largest share of the builders's hardware market. Continued homeowner interest in personal safety was expected to add to sales, and demand for locks and other safety devices to enhance security in schools, universities, and hospitals was projected to increase sales in the non-residential market. GIA's report also suggested an upswing in the home renovation and do-it-yourself (DIY) markets were also likely to boost industry sales.

On October 3, 2011, Illinois-based Fortune Brands Home & Security was spun off from parent company Fortune Brands to operate as an independent company. The company reported revenues totaling $3.2 billion in 2010, with about 17 percent of total sales derived outside the United States. The company employed an estimated 16,000 workers at the end of 2010. Fortune also received the 2011 Edison Silver Award Winner for Excellence in Innovation for its Master Lock's Speed Dial.

Ingersoll-Rand Co. posted revenues of $14.07 billion with 59,000 employees in 2010. However, the largest worldwide manufacturer of locks, Stockholm, Sweden-based ASSA ABLOY AB, reported revenues of $5.42 billion in 2010 with 37,279 employees. The company sells its products in 50 countries under several brands, including ABLOY, Norton, VingCard, Yale, among others. Additional hardware manufacturing company's include Pennsylvania-based Rockwood Manufacturing with revenues of $11.2 billion in 2010 and Masco Corporation in Taylor, Michigan, with sales of $7.59 billion in 2010 and 32,500 employees.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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