Water and sewer utility service prices will continue to increase during the next three years as demand continues to rise and service areas expand due to the rising number of US households
Los Angeles, CA (PRWEB) April 29, 2014
Water and sewer utilities have a low buyer power score of 2.7 out of 5. This score reflects the buyer's limited ability to negotiate a favorable price and terms on their contract due to the low availability of substitutes for this specialized service. Barriers to entry are high, so whichever operators are in the buyer's service area or nearby are the operators they are likely to end up working with. However, buyers do benefit from low price volatility and little supply chain risk, particularly as market share concentration increases. As the top companies providing this service grow larger, they are generally becoming more financially stable, which can bring peace of mind to a buyer.
Because the service is in high demand, prices have been increasing during the three years to 2013. However, the price increases are eclipsed by the ever-mounting cost of an ill-equipped water and sewer utilities owner operating the utility in-house. This can be a costly endeavor for an agency, such as a small city government, that does not have the economies of scale to achieve cost savings or to afford needed infrastructure upgrades. Therefore, although prices are increasing, the price of contracting out these services is in many cases a better deal than facing the rising cost of replacing infrastructure that many US cities will soon face.
Buyers are limited by their geographical region and may find that they can only select from the service providers nearby. However, some larger operators with plans to expand into the region in which the buyer is located may be enticed. Service providers work closely with buyers to determine if the two are a good fit. Each buyer has different infrastructure and community needs and a changing backdrop that they are working within. For example, the community may be growing or contracting, or its water needs may be changing substantially, such as going from strong agricultural use to more residential use. For more information, visit IBISWorld’s Water & Sewer Utilities procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of water and sewer utility services. Water and sewer utilities provide water supply, water resource management, water quality control management, water distribution management, water policy advisory services, desalination services and water treatment services to residents and business owners in a municipality.
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.