Service prices are anticipated to increase in the next three years due to continued rising demand; however, falling operating costs will shield prices from rising significantly.
Los Angeles, CA (PRWEB) July 26, 2014
Asphalt paving services have a buyer power score of 2.7 out of 5. This score signifies that buyers have a moderate level of negotiating power in the market. “Buyers derive power primarily from the low level of market share concentration and moderate specialization,” says IBISWorld procurement analyst Deonta Smith. “However, the low availability of substitutes negatively impacts buyer power.”
A wide range of contractors perform asphalt paving services. Therefore, buyers can look to multidisciplinary construction firms, such as Granite Construction Inc. or Lane Construction Corporation, to procure these services. “Buyers can also procure services from locally based service providers, which may only provide niche services under the asphalt paving umbrella,” adds Smith. Although small operators and paving specialists make up the majority of service providers, larger multidisciplinary construction firms have gained market share by dominating specific markets (e.g. commercial construction, industrial construction, highways and utilities). Nonetheless, the wide selection of vendors increases buyer power.
Likewise, the moderate specialization of asphalt paving services benefits buyers. Buyers may require slightly customized solutions, given their particular environments and uses for the paved surface, but overall, project requirements will not vary noticeably. As a result, any operator, regardless of technological capacity, can fulfill most project needs, further expanding a buyer's options when selecting a vendor.
On the other hand, there are several factors that work against buyers of asphalt paving services. For example, the lack of substitutes for the services narrows the buyer's scope of alternatives. If a buyer is not satisfied with the firm that serves their operating sector, procuring services from a concrete paving service contractor may be the only other option. Despite this factor, considering this alternative can help buyers obtain leverage by creating competition during the negotiation process. For more information, visit IBISWorld’s Asphalt Paving Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of asphalt paving services. Providers of these services pave a variety of surfaces with asphalt, including parking lots, driveways, walkways and shopping and retail centers. Many service providers also offer asphalt resurfacing, patching, sealcoating and crack sealing services. This report excludes road and highway asphalt paving 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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