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DIY and hardware trade and tool industry post growth in the 1H 2011

With three months left go before the fair begins, the industry and trade associations participating in Internationale Eisenwarenmesse report positive developments throughout the year. Although growth has become less dynamic since the summer, turnover has risen among the German tool industry, the DIY and hardware trade, and the industry for construction, home and garden products. The associations expect to obtain additional momentum from Eisenwarenmesse, which will be held in Cologne from 4th to 7th March 2012. Around 2,600 suppliers from 50 countries have registered to take part in this event.

According to the Association of the German Tool Industry (FWI), turnover in the German tool industry amounted to 3.4 billion in 2010 and was thus 25 per cent higher than in the crisis year of 2009. Following a 16.8 per cent increase in the first half of 2011, the rate of incoming orders has declined somewhat since July. In the first half of 2011 the export business increased by 15.7 per cent compared to the same period of the previous year. Europe continues to be the German tool manufacturers' most important sales market, with 55.7 per cent of its total exports going to EU countries. In addition, exports to these countries increased by 15.6 percent. The tool producers belonging to the FWI are in an upbeat mood, with more than 60 per cent of those surveyed saying the current status of their business is "satisfactory", while 38 per cent described their business performance as "good". Two-thirds of the tool manufacturers surveyed expect their business situations to remain stable between now and the spring of 2012. A third of the tool manufacturers surveyed expressed concern that the economy may weaken.

A similar picture is painted by the Central Association of the Hardware Trade (ZHH). The upswing continued in the first half of 2011, although the growth rates in the production-associated trade were considerably higher than in the hardware retail trade. The hardware and household equipment retail trade grew by about 4.5 per cent - driven by the power tools, fastening technology, small electrical appliances, household equipment and security technology segments. According to the ZHH, the willingness to buy that consumers have shown so far in 2011 is expected to continue until the end of the year, even though it is still too early to predict the effects of the eurozone debt crisis. Business is therefore expected to grow in 2011 as a whole.

In the first half of 2011, the economic upswing in Germany also led to turnover increases of between 7 and 11 per cent for the production-associated trade, which serves commercial end customers. Turnover for the construction fittings segment increased by 7.5 per cent in 2011, a figure that was better than expected. The tool trade recorded a turnover increase of 11 per cent in the first half of this year. There was growth in all product groups, with especially strong increases in the protective equipment, operating equipment, tools and industrial supply segments. The ZHH expects that the slowdown in growth that began in the summer will continue. However, because the order books are full, the association expects the production-associated trade to post further growth in the coming months.

The rainy summer also temporarily slowed down growth in the home improvement/DIY centres, according to the Federal Association of the German DIY, Building and Garden Specialist Stores (BHB). Nonetheless, the German home improvement/DIY trade continued its stable course of growth in 2011. By the end of September, home improvement and DIY centres had increased their gross turnover by one per cent compared to the same period last year. Germany's home improvement/DIY centres generated a total turnover of 14.17 billion in the first nine months of 2011. Following record turnover in the spring, business in the summer months was far below the trade's expectations. However, the sector report by the BHB and GfK shows that turnover has continuously risen again since August. The product groups that are currently driving turnover include those for construction materials and construction chemicals (+3.3 per cent), wood and plastics (+5.1 per cent) and coating materials (+6.6 per cent).

The House & Garden Manufacturers' Association has reported that the sector is continuing to grow at above-average rates in Germany. The association's current membership consists of 131 industrial companies producing construction, home and garden products. According to the association, the sector's turnover increased between 4 per cent in Germany and 9 per cent at the international level in the first half of 2011. The good development of the first half of the year did not continue at this rate in the second half. All the same, the House & Garden association expects the sector to end 2011 with a positive result, posting growth of between 2 and 3 per cent for the year as a whole.



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