Los Angeles, CA (PRWEB) July 18, 2014
Construction project management services have a buyer power score of 2.7 out of 5. According to IBISWorld analyst Sean Windle, this score indicates that neither buyers nor suppliers command an overwhelming amount of leverage when it comes to negotiating the purchase of construction management and related services.
Because each construction project is different and presents unique challenges, construction project management is a service requiring a significant degree of specialization. Suppliers must not only have experience performing design, contracting and management work in the buyer's area of development, but they must also be familiar with applicable local, state and federal regulations, continues Windle. Market suppliers include AECOM, Bechtel Corporation and CH2M Hill Inc. Furthermore, suppliers must be able to use their experience and knowledge to best meet the buyer's specific budget and time constraints, a factor that limits buyer power. High switching costs also diminish buyer power. Once a project is off the ground, the cost of switching suppliers can be incredibly expensive because any new vendor will have to go through the same extensive vetting process and be brought up to speed with the standing of the project.
Increasing demand following the recession has also caused price growth to accelerate in recent years, which has reduced buyer power. For example, after growing lethargically in 2011, nonresidential construction activity surged 12.7% in 2012 and is anticipated to increase strongly in 2014.
Despite these factors, some market characteristics help lift buyer power as well, such as an increasing number of suppliers entering the marketplace. Despite the moderate degree of market share concentration and the presence of large-scale suppliers with significant market share, high demand and strong profit margins have spurred more suppliers to enter the market. This trend has given buyers an increasing number of suppliers from which to choose. Furthermore, the federal government, which is a major source of demand and revenue for suppliers in this market, is defined by steady and reliable funding, which aids buyer power. For more information, visit IBISWorld’s Construction Project Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of construction project management services. Duties may include feasibility reviews, cost analysis, estimating, troubled-project turnaround and value management. Construction project management can be divided into two broad roles: agency construction management and at-risk construction management. Agency construction management limits the role of the supplier to that of an independent advisor, while at-risk construction management expands this role to include architectural and contracting duties. Suppliers include integrated contracting and engineering firms, as well as consulting groups.
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.