Electrical transformer price growth is forecast to accelerate over the next three years
Los Angeles, CA (PRWEB) September 16, 2014
Electrical transformers have a buyer power score of 3.0 out of 5. This score indicates a moderate advantage for buyers when negotiating supply agreements. Buyers have benefited primarily from slow and predictable price growth during the past three years, when the average benchmark price for electrical transformers has increased at an estimated annualized rate of 1.0% and price volatility has been low. “Despite higher demand from commercial and industrial building markets during the past three years, declining steel, copper and aluminum prices have kept product price growth in check,” says IBISWorld research analyst Sean Windle. Drops in the prices of these metals have lowered production costs for suppliers and placed downward pressure on prices.
Strong competition from low-cost imports has also limited price growth. Suppliers in China and Mexico, two of the largest exporters of electrical transformers to the United States, produce comparable goods at a fraction of the cost compared to US suppliers. “These cost savings are passed down to buyers in the form of lower prices,” Windle explains. “In response, US suppliers have cut labor costs to price their products more competitively.”
Despite slow price growth and low price volatility, other characteristics of the market, such as high market share concentration, work against buyers. While a large number of small and medium-size wholesalers exist in the marketplace, their product offerings are primarily limited to low-voltage transformers used in consumer electronics and low-tech building applications. As a result, many buyers end up sourcing electrical transformers through the highly concentrated manufacturing base, which includes many large-scale, multinational companies. Major vendors include ABB Ltd., General Electric, Siemens and TBEA Transformer Group. For more information, visit IBISWorld’s Electrical Transformers procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of electrical transformers. These machines are used to step-up power for distribution across long-distance power lines, and to step-down distribution power for use in nonresidential and residential buildings. Suppliers are primarily manufacturers, but wholesalers also provide these products.
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.