The appreciating dollar is expected to dry up export markets, forcing suppliers to divert their products to the domestic market, where heavy price competition will take place
Los Angeles, CA (PRWEB) February 23, 2014
Pumps and compressors have a buyer power score of 3.7. Although pump and compressor prices rose strongly in the three years to 2013, there are a number of other factors that supported buyer purchasing power. The rising number of suppliers, coupled with low market share concentration, indicates that competition is primarily based on price, says IBISWorld analyst Kiera Outlaw. In addition to intensifying price competition, the rising number of suppliers is also reducing the number of rural or remote operators because establishments are increasingly popping up next door. In these areas, buyers are beginning to experience a higher level of negotiation power as suppliers must compete based on price to remain viable.
Further placing downward pressure on prices is the strengthening US dollar. Although the US dollar experienced some significant decline on the back of the recession, the dollar's value posted growth in the three years to 2013. A weak US dollar makes domestic goods more attractive to export markets. However, recent growth in the value of the dollar led many export markets to shy away from goods produced in the United States, continues Outlaw. To this end, exports exhibited signs of decline and are expected to decline further in the three years to 2016. Suppliers of pumps and compressors have been forced to reduce prices to compete with cheaper imports.
In addition to the increasing number of suppliers and the stronger US dollar, IBISWorld expects that the market will also experience a slowdown in demand from some mining industries. Buyers that operate in the mining sector tend to purchase expensive pump and compressor products. To entice these buyers to spend, suppliers will again be forced to lower prices. However, in the three years to 2016, IBISWorld forecasts that the market will exhibit high price volatility, which could weaken buyer purchasing power. Markets that display high price volatility are likely to experience sudden prick hikes or lows. While a sudden decline in prices is good news for buyers, a sudden hike in prices is not. To this end, buyers should aim to hedge against price shocks by establishing long-term supply contracts. For more information, visit IBISWorld’s Pumps & Compressors procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of pumps, air and gas compressors, and other fuel and oil dispending pumps for industrial and commercial use. Pumps and compressors are similar in that both products increase the pressure on a fluid and allow transport through a pipe. Pump and compressor manufacturers and wholesalers provide oil well pumps, oil field pumps, lubricating and cooling pumps, as well as air motors and packaging compressors. Pumps and compressors are used in a number of industries, including the mining, utilities and manufacturing sectors.
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
About IBISWorld Inc.
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.