Los Angeles, CA (PRWEB) April 28, 2014
The building inspection services market has a buyer power score of 2.9 out of 5.0, indicating that this is a seller's market. The relatively low buyer power score is primarily a result of the turnaround in the economy, following the devastation of the Great Recession. As the economy returned to growth, corporations experienced a return to higher profit margins, and entrepreneurs were more apt to enter the market. In the three years to 2013, corporate profit is estimated to rise an average annual rate of 5.5%, while the number of new business ventures is estimated to increase at an average rate of 0.4% annually. Combined, these two factors are expected to support the market's price growth during the three-year period, says IBISWorld research analyst Kiera Outlaw, proving that these factors will have an adverse impact on buyer power.
In addition to broad economic factors, buyer power is also reduced due to the low availability of substitutes; there are no direct substitutes for building inspection services. “In some situations, buyers may need to obtain a specialized inspection for particular aspects of a building, such as electrical wiring or plumbing,” says Outlaw adding, “specialized inspections are supplementary to building inspections, though, so one cannot be substituted for the other.” Buyers may forego building inspections, but that is a particularly unwise move. The purpose of building inspections is to evaluate the condition of the facility prior to purchase or lease, providing buyers with a detailed report on any repair or maintenance issues that the building needs. To this end, the severe lack of substitutes reduces buyer negotiation power.
With no viable substitute service, buyers are forced to deal with the localized nature of the market, which further pressures buyer power. Although there are more than 21,000 building inspectors in operation, providers typically target their local or regional area, lessening the pool of suppliers. The geographic distribution of the market correlates with economic activity, so densely populated areas often host a high concentration of the market, giving buyers a larger pool of suppliers to choose from. Overall, an inspector's level of experience and qualifications are far more important than the price of services. To this end, while providers compete based on price, buyers can expect that higher levels of supplier experience and qualifications will incur a higher price. For more information, visit IBISWorld’s Building Inspection Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of building inspection services. Building inspectors evaluate the structural integrity of a property, providing cost estimates on areas of concern or areas that require maintenance. Typically, building owners, prospective tenants and investors procure building inspection services pre- and post-lease. Building inspection companies include franchised operations, sole proprietorships and part-time contractors. This report focuses exclusively on commercial building inspections, and it excludes new and alteration building construction. The report also excludes home inspection services and other specialty inspection services, such as power line, and plumbing, sewer or acoustics inspection 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
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.