Prices have risen strongly during the past three years as demand from the construction sector picks up postrecession
Los Angeles, CA (PRWEB) August 10, 2014
Electrical wire has a buyer power score of 2.1 out of 5. This score indicates that suppliers have an advantage over buyers when it comes to negotiating supply agreements. 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 is tied heavily to the level of building activity in the United States, which has surged the past three years as the construction sector recovers from the recession. “Strong demand from nonresidential and residential building industries has resulted in strong price growth, with the average price for electrical wire expected to increase from 2011 to 2014,” according to business research analyst, Sean Windle. Strong demand and price growth has been a hindrance to buyer power.
Other factors limiting buyer power include the lack of any viable substitute products for electrical wire and the threat of rising input costs, particularly of metals like copper and aluminum. Although copper prices have fallen over the past three years and are expected to continue falling heading into 2017, copper makes up a large share of supplier revenue. As such, the threat of rising inputs exposes buyers to supply chain risks. 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.
Factors boosting buyer power include a low level of product specialization, low switching costs and high import competition. “High import competition is especially beneficial to buyers because it spurs more price competition in the US market, which has helped keep price growth in check,” says Windle. Furthermore, given the moderately concentrated nature of the market and the presence of several large-scale vendors, imports provide buyers with more supplier options. Major vendors include Southwire Company, General Cable Corporation and CommScope Inc. 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. Suppliers include manufacturers, wholesalers and retailers. This report does not include electrical cable.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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.