Prices are forecast to continue to grow at a comparatively slower rate during the next three years on the back of the expanding construction sector.
Los Angeles, CA (PRWEB) May 28, 2014
Wood processing services have a buyer power score of 3.2 out of 5. During the three years to 2013, buyer purchasing power is expected to have declined due to rising service prices and declining supplier profit levels, making suppliers less willing to negotiate lower prices. “Wood processing service prices are heavily dependent on the value of residential and nonresidential construction as well as the number of businesses in the United States,” says IBISWorld procurement analyst Hayk Muradyan.
The value of residential and nonresidential construction improved significantly during the three years to 2013 as the economy recovered from the recession. In addition, the number of businesses has grown at a slow yet steady rate. These trends have led to price increases for wood processing services, negatively affecting buyers. “In the three years to 2016, prices are forecast to grow at a slightly slower annualized rate as the economy stabilizes and construction activity continues to expand,” adds Muradyan. “These trends will further boost service prices, restraining buyers' ability to negotiate favorable contractual terms.”
Nevertheless, high market fragmentation and mounting competition benefit buyers by providing a larger pool of suppliers to choose from. Suppliers are increasingly engaging in price-based completion to win new customers and maintain or gain market share in a highly saturated market, allowing buyers to obtain better deals. Buyers are also expected to benefit from the market's low price volatility in the three years to 2013. In addition, buyers have benefited from limited to no increases in supplier input costs, which have prevented prices from increasing more rapidly. However, high product specialization and a low level of substitutes have made it difficult for buyers to locate suppliers capable of meeting their specific requirements. Buyers with high production scopes should engage in long-term contracts with large, national suppliers to ensure that their service requirements are adequately met. Buyers making ad hoc service purchases should deal with local and regional suppliers to benefit from their greater level of customer service and proximity to the buyers' locations. For more information, visit IBISWorld’s Wood Processing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of wood processing services. Suppliers provide services that include sawmilling, veneer production, wood base panels manufacturing, wooden containers manufacturing, furniture manufacturing, cork products manufacturing and cane or wicker goods processing 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.