Prices are expected to continue rising as nonresidential construction continues to increase.
(PRWEB) July 13, 2014
The commercial carpet market has a buyer power score of 3.5 out of 5, reflecting market conditions that are currently favorable for buyers. Demand for commercial carpet has increased during the three years to 2014 because of strong growth in nonresidential construction projects, which have been facilitated by growing corporate profit margins during the same period. According to IBISWorld procurement analyst Kiera Outlaw, “as commercial space increases, the need for carpeting follows suit. Consequently, commercial carpet prices have been rising in the past three years, displaying moderate volatility.”
The moderate market share concentration and low profit margins within the market have not been beneficial for buyers, though. The declining number of suppliers operating in the market has inhibited buyers' ability to pit suppliers against one another to obtain lower pricing. Moreover, low profit margins within the market indicate that suppliers are typically inflexible on pricing because prices are as low as they can go, especially among wholesalers. “Despite these adverse market characteristics, the moderate availability of viable substitutes, albeit with varying price points and total cost of ownership, have been beneficial for buyers,” says Outlaw. Buyers also benefit from the moderate degree of product standardization. These market characteristics allow buyers to consider viable alternatives, while concurrently having access to a wide range of various colors and designs of commercial carpet.
Consolidation has been rising among all suppliers in the market. With fewer suppliers to choose from and increasing market share concentration, negotiation power will begin to tip in favor of suppliers, albeit not for a few years. Moreover, moderate price volatility has also been disadvantageous for buyers, leaving them at a higher risk of sudden and unexpected price increases during the period. With market share concentration set to continue rising, buyers should seek to secure their commercial carpeting needs now to protect against sudden price hikes and to have access to a larger pool of competitive suppliers. The top four vendors in the market are Dixie Group, Interface, Mohawk Industries, and Shaw Industries Group.
For more information, visit IBISWorld’s Commercial Carpet procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of commercial carpet and rugs. These products are generally woven or tufted and are primarily made from synthetic materials, such as nylon. Commercial carpet and rugs are made with a higher level of durability than residential carpet to withstand high-volume foot traffic. Suppliers showcase sample commercial carpet with their respective specifications to indicate how much wear and tear the carpet can take. Commercial carpet and rugs are available from manufacturers and distributors. This report excludes other flooring materials, such as laminate, as well as installation, maintenance and repair 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.