Price growth is forecast to accelerate in the next three years, as demand from the construction sector continues to accelerate
Los Angeles, CA (PRWEB) May 12, 2014
Electrical wire has a buyer power score of 2.9 out of 5. “This score indicates a shared power balance between buyers and suppliers when it comes to negotiating supply agreements,” says IBISWorld procurement analysts Sean Windle. Electrical wire provides power to single-family homes, apartment communities, dormitories, office towers, retail centers, schools, hospitals, power plants and other residential and nonresidential buildings and structures. As such, demand for electrical wire is tied heavily to the level of construction activity in the United States. While building activity plummeted during the economic downturn, post-recession growth in residential and nonresidential building industries has begun to pick up. Still, building activity has yet to full recovery, which has resulted in steady upward growth in prices. While prices are rising, steady growth benefits buyers by allowing them to better plan and budget future expenses.
Low market share concentration among electrical wire suppliers also boosts buyer power. Buyers have a plethora of options from which to choose when sourcing electrical wire products, and the low market share concentration helps promote price competition among suppliers vying for business. Low market share concentration and competition from imports have helped keep price growth relatively in check, despite increasing demand from the construction sector. Furthermore, a low level of product specialization helps to fuel more suppliers into the market. Major suppliers include Southwire Company, Superior Essex Inc., General Cable Corporation and Encore Wire Corporation.
Factors limiting buyer power include the lack of any substitute products, and the threat of rising input costs, particularly copper. Buyers also face significant total ownership expenses, primarily from the cost to install electrical wiring. Despite these setbacks, buyers are encouraged to purchase electrical wire now, or lock in current prices, because increasing domestic demand is expected to accelerate price growth in the next three years.
For more information, visit IBISWorld’s Electrical Wire procurement category market research report page.
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IBISWorld Procurement Report Key Topics.
This report is intended to assist buyers of electrical wire. Electrical wiring is used to provide power to buildings and structures and is also referred to as building wiring. This report does not include electrical cable.
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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