As providers’ wages increase during the next three years, much of the added cost will be passed onto buyers.
Los Angeles, CA (PRWEB) October 03, 2013
To the benefit of buyers, strong growth in demand for boiler and furnace maintenance and repair (M&R) during the past three years has not been fully mirrored in the price of the service. “While price has increased, it has done so moderately and without volatility,” says IBISWorld procurement analyst Hayden Shipp. The M&R market's fragmented structure and relatively low risk have contributed to favorable buying conditions. As a result, the buyer power score for boiler and furnace M&R is 3.6 out of 5.0.
Buyers' favorable position in procuring M&R services is furthered by a projected slowdown in annualized price growth over the next three years. The slowing price growth reduces the urgency for buyers to lock in lower prices with multiyear contracts for predictive or preventive maintenance, though doing so will still save them money. “Such contracts are particularly advantageous for buyers that need add-on services, such as plumbing, refrigeration or building automation M&R,” says Shipp, “because contracts with facilities services firms or building control systems firms can provide overall cost savings.” Slowed price growth, however, means that the penalty for waiting to sign such contracts is declining, and compared to 2010, buyers can now afford to wait until their budgets expand or until M&R is absolutely necessary.
Demand for boiler and furnace M&R has grown considerably with rising construction activity because building M&R tends to follow trends in construction value. Additionally, strong growth in the price of crude oil, which has also been extremely volatile, has motivated demand for M&R because these services improve equipment efficiency, and reduce gas or oil usage. Growth in the number of M&R firms has also helped satisfy rising demand while keeping price growth in check. Many firms have entered the market with ease due to low barriers to entry. As such, the M&R market's fragmented structure ensures that buyers' choices are plentiful and that switching providers is not overly costly or difficult. Current major vendors include Johnson Controls Inc., Comfort Systems USA Inc., Service Experts LLC, Trane Inc.m Carrier Corp. and Schenider Electric SA. For more information, visit IBISWorld’s Boiler & Furnace Construction & Maintenance procurement research report page.
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IBISWorld Procurement Report Key Topics
Boilers and furnaces provide central heat for buildings, and this report helps building owners select a service provider to repair and maintain them. Boilers heat or vaporize water, and hot water or steam becomes the heat-transfer medium that warms building spaces through radiation. Furnaces heat air, which is distributed throughout a building via ducts. Maintenance and repair (M&R) services can provide cost savings by increasing the energy efficiency of boilers and furnaces, and improving the safety of these appliances by fixing heat exchanger leaks and byproduct ventilation. Additionally, M&R can include predictive and preventive maintenance. Heating, ventilation and air conditioning (HVAC) contractors, manufacturers and facilities services firms provide the services for this market.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.