Due to less volatile expected input prices, prices for circular saws are forecast to grow at a slower rate in the three years to 2016.
Los Angeles, CA (PRWEB) March 16, 2014
Circular saws and accessories have a buyer power score of 2.9 out of 5. This score reflects the volatility of external drivers and input prices, indicating that suppliers have limited flexibility with their prices. This translates to limited negotiating power for buyers. “These factors are underlined by the low market structure score, which measures the availability of substitutes, market share concentration and switching costs,” according to IBISWorld procurement analyst Agiimaa Kruchkin. Demand for circular saws and accessories is heavily dependent on private nonresidential construction, industrial production and private investment in home improvements. The recent global economic crisis sent the number of construction projects on a precipitous decline, causing demand for circular saws and related tools to plummet. Similarly, households cut their spending on home improvement projects, hampering demand for circular saws, among other tools and machinery.
Nevertheless, the ongoing economic rebound has been fueling demand for circular saws and accessories from major downstream markets, including construction, utilities and mining. “As a result the price of the primary input, steel, grew in the three years to 2013,” says Kruchkin. Rising steel prices caused prices for circular saws and related products to grow in the three years to 2013, further eroding buyer negotiating power.
Volatile steel prices and fluctuating demand from downstream markets create an unpredictable purchasing environment that weakens buyer power. Suppliers of circular saws and accessories have moderate profitability, and the volatility of primary inputs, like steel, makes margins unstable. As a result, prices for equipment are often in flux as suppliers try to maintain profitability. Suppliers' challenge to protect returns severely limits their price flexibility. However, bulk purchases and supply agreements provide buyers with potential cost savings; volume discounts can reduce per-unit prices, while supply agreements can shield buyers from future price spikes.
For more information, visit IBISWorld’s Circular Saws & Accessories procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of circular saws, which are blade or disc tools used for cutting wood or other materials. Circular saws may be hand-held or table-mounted, and also vary between cordless and corded. Typically, circular saws are used to cut wood, masonry, plastic or metal. Circular saw accessories include blades, power cords, clamp sets, knobs and wrenches, among other items.
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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