Prices are expected to accelerate due to higher demand and rising input costs
Los Angeles, CA (PRWEB) September 15, 2014
Electrical conduits have a buyer power score of 2.5 out of 5. This score indicates that negotiating conditions are not favorable for buyers. This score reflects negative pricing trends and moderate supply chain risks. However, the buyer power score is bolstered by low market share concentration and product specialization. An improving economy will drive strong demand for electrical conduits. Electric power consumption, both residential and commercial, is expected to increase steadily. According to IBISWorld procurement analyst Andrew Yang, “in the face of this rising demand, suppliers have had the leverage to raise their prices.” In the three years to 2014, falling input costs have helped moderate some of these price increases. However, the prices for many of the raw materials used to manufacture electrical conduits are expected to rise significantly in the three years to 2017. As a result, production costs will be higher for manufacturers, placing greater pressure on suppliers to raise their prices. This combination of strong demand and rising input costs will result in prices accelerating in the three years to 2017, which will raise electrical installation costs for buyers.
“Buyers also suffer from moderate market risks,” says Yang. Prices for the raw materials used to manufacture electrical conduits are expected to rise, exposing buyers to supply chain risks. These raw materials often have volatile pricing, which raises the likelihood of volatile prices for electrical conduits. In addition, there are few viable substitutes for electrical conduits, increasing the dependence of buyers on these products.
Factors boosting buyer power include a low level of product specialization, low switching costs and low market share concentration. Low product specialization and market share concentration indicate that there is a wide variety of suppliers for buyers to choose from. No supplier dominates the market and dictates pricing. Switching costs are also low, reducing the likelihood that the buyer will get locked in with one supplier. The largest vendors in the market are Home Depot and WW Grainger.
For more information, visit IBISWorld’s Electrical Conduits procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of electrical conduits. Electric conduits are tubing systems designed to help protect and route electrical wires. Electric conduits are used extensively in wire installations. Electrical conduits are typically made of either steel, aluminum or polyvinyl chloride (PVC). This report excludes conduit bodies, electric boxes and raceways.
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.