Rebounding economic activity will continue driving prices of instrumented control systems services over the three years to 2017, albeit at a slightly slower annualized rate
Los Angeles, CA (PRWEB) August 23, 2014
Instrumented control systems services have a buyer power score of 3.1 out of 5, which indicates moderate negotiating power for buyers. Buyers primarily benefit from the highly fragmented nature of the market, which encourages price-based competition among suppliers. During the three years to 2014, the economic recovery has revived demand for manufactured goods, which has fueled price growth for design and engineering services. Demand for these services is anticipated to remain strong in the three years to 2017 due to greater electric power consumption and steady demand from the industrial production and manufacturing markets. Suppliers of instrumented control systems services will benefit during the period as prices go up, albeit at a slower rate than during the previous three-year period. “Meanwhile, buyers will continue to benefit from price-based competition in the market,” says IBISWorld business research analyst Agiimaa Krunchkin.
The significant switching costs and the highly specialized nature of instrumented control systems services largely hamper buyer power. Buyer power is restricted due to the persisting need for highly customized control systems design solutions. Furthermore, the availability of substitute services is low, as suppliers are typically the key source of workers qualified to provide design and engineering solutions. However, price volatility for these services has remained relatively low during the past three years. Low price volatility promotes a stable purchasing environment for buyers by allowing them to accurately budget and evaluate prices. “Moreover, the diversification of demand across several downstream markets, including chemical manufacturing and utilities providers, has mitigated vendor financial risk among market leaders, aiding buyer power,” says Krunchkin.
In the next three years, buyers will benefit from a slower anticipated growth in service prices, which will then shape more favorable purchasing conditions. Additionally, buyers can determine the need and frequency for instrumented control systems services and then enroll in multiyear contracts to help mitigate long-term costs and rising prices. For more information, visit IBISWorld’s Instrumented Control Systems Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of instrumented control systems services. Specifically, this report covers fire and gas monitoring and control system engineering services, as well as process control system design and engineering services. Suppliers of these design and engineering services help buyers with programming, and starting up new and outdated control systems; evaluating existing safety instrumented systems; identifying, evaluating and reducing risk; auditing processes; developing procedures; and planning capital improvements to collect data for the control and monitoring of operations.
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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