Growth in industrial development and nonresidential construction activity is projected to increase demand for electrical engineering services, thereby resulting in price increases
Los Angeles, CA (PRWEB) April 18, 2014
Electrical engineering services have a buyer power score of 3.5 out of 5. “This score reflects favorable conditions for the buyer, despite high specialization and switching costs, a lack of substitutes and growing demand negatively impacting buyer power,” says IBISWorld procurement analyst Erick Delgado. Buyers of these services benefit from a highly fragmented market, low supply chain and vendor financial risks and low price volatility.
A highly fragmented market has encouraged price-based competition among suppliers, which has been beneficial for buyers' negotiating power. “Most providers are nonemployers or small design firms, which compete primarily on price, and there are few large companies that are relatively inflexible in price during negotiations due to brand equity,” says Delgado. The low market share concentration gives buyers several options to choose from when purchasing electrical engineering services.
In the three years to 2013, the recovering US economy has led to overall renewed demand for construction and related activities, which, in turn, has fueled an upward trend in prices for electrical engineering services. The need for electrical engineering services is anticipated to grow during the three years to 2016 due to strengthened demand from downstream industrial development and construction markets, as well as greater access to credit for businesses. As a result, prices are expected to continue rising during this period.
Because electrical engineers provide services across several industries, demand driver volatility has been low. Thus, overall demand for electrical engineering services has remained stable, and buyers have not experienced a significant risk of sudden price shifts. Low price volatility promotes a stable purchasing environment for buyers by allowing them to accurately budget and evaluate prices over time. Moreover, the diversification of services across several markets has led to low vendor financial risk. As such, buyers can expect to be more secure in negotiating long-term electrical engineering contracts during the next three years. Major vendors in this market include Burns & McDonnell, CH2M Hill Inc., Stantec Inc. and Tetra Tech Inc.
For more information, visit IBISWorld’s Electrical Engineering Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of electrical engineering services. Suppliers of electrical engineering services help buyers with high, medium and low voltage power distribution, facilities electrical systems design, lighting design, building systems controls, standby power applications, power systems analysis and evaluations of electrical safety code compliance, among other services. This report excludes electronics engineering and computer engineering services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
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.