Rebounding economic activity has led to renewed demand for environmental remediation services.
Los Angeles, CA (PRWEB) November 30, 2013
Environmental remediation services have a buyer power score of 3.7 out of 5. "This score reflects current pricing trends and a moderate to high rate of bargaining power," says IBISWorld procurement analyst Agiimaa Kruchkin. "The type of contamination, the scope and the complexity level of the contamination, and the number of hours required to perform the remediation services are factors that dictate the market's contract prices." At the same time, suppliers can offer an array of related services, including consulting, construction and engineering solutions. The market's current buyer power score reflects negative pricing trends caused by rising input costs that occurred in the three years to 2013. For example, the prices of chemicals used in decontamination services and the steady expansion of wage costs have resulted in a moderate bargaining power. These rises are slightly offset by the ease of purchasing associated with these services; furthermore, the buying lead time is relatively short, which ultimately expedites and eases the procurement process.
The low switching costs for environmental remediation services positively add to this market's buyer power. In addition, suppliers' moderately high profit margins allow buyers to have more negotiating room when working with a supplier to set a price for remediation and related services. "At the same time, buying power is limited due to the low availability of substitutes, high specialization among suppliers, and the independent nature of related services," says Kruchkin.
Firms that provide environmental remediation services operate in a mature market with a relatively low level of financial risk. This factor, along with the moderately low barriers to entry for this market, will lead more firms to enter this market in coming years. This will help buyer power because it widens the pool of available suppliers, encouraging more market competition. Despite this growth, the escalating level of government regulation will limit the increasing number of operators. As a result, buyer power is expected to remain relatively stable in the three years to 2016. Major vendors include CH2M Hill Companies Ltd., Energy Solutions Inc., ERM Group Inc. and Tetra Tech Inc. For more information, visit IBISWorld’s Environmental Remediation Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of environmental remediation services. Service providers are firms that decontaminate affected areas, such as buildings, for a variety of individual, business and government needs. Providers of remediation services typically specialize in removing, neutralizing or destroying diverse harmful substances, including the abatement of lead, mold and asbestos, among other materials. Environmental remediation services include site decontamination services, building remediation services, nonhazardous waste and recyclable material transportation services.
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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