As the pace of manufacturing increases during the three years to 2016, the price of bearings is expected to rise as well
Los Angeles, CA (PRWEB) February 22, 2014
Bearings have a buyer power score of 3.0 out of 5.0, representing a medium level of buyer negotiating power. Buyers benefit from widespread availability of the product, but are somewhat hindered by high market share concentration, with major manufacturers and distributors largely setting pricing terms based on upstream input cost fluctuations. According to IBISWorld procurement analyst Natalie Everett, “The cost of switching from one vendor to another is at a medium level, owing to the high degree of specialization of many of the higher-priced bearings that are components of large industrial equipment.”
As such, the high market share concentration lends itself to low supply chain risk. Bearings are an extremely integrated component of manufacturing processes, so the distribution channels are well-established and the large manufacturers and distributors are on solid financial footing. “Despite their dominance in the market, these large players do not dictate bearing prices,” says Everett. The benchmark price for bearings rose at a moderate, steady pace during the three years to 2013, and is expected to continue increasingly through 2016. Prices have been forced upward by volatile steel prices and rising demand from the manufacturing sector. However, import competition has kept prices from rising at a faster rate. Declining demand from federal defense contractors has further limited price increases; federal funding for defense has declined over the past three years.
Vendors in this market enjoy a medium profit level. As a result, buyers do have some room to negotiate lower prices despite rising input costs and increased, competing demand across many manufacturing sectors. Major vendors in this market include Aktiebolaget SKF, JTEKT Corporation, Schaeffer Manufacturing Company and Timken.
For more information, visit IBISWorld’s Bearings procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of bearings for industrial use. Typically composed of balls or rollers, bearings are machine elements that constrain motion between moving parts, facilitating a specific movement and minimizing friction to improve efficiency. Varieties of bearings include flanged, radial and wheel bearings, among others.
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.