Prices for plumbing services are expected to continue rising as input costs and demand rises
Los Angeles, CA (PRWEB) September 20, 2014
Plumbing construction services have a buyer power score of 3.1 out of 5, indicating a moderately favorable purchasing environment for buyers. According to market research firm IBISWorld, this score reflects current and future pricing trends that will limit the buyer's ability to negotiate from historically high prices. Other factors that negatively affect buyer power are a lack of substitutes, high volatility in demand for construction and the moderate switching costs. Buyers benefit, however, from low product specialization, low market share concentration, low vendor financial risk and a reduction in service price volatility.
Although demand volatility from the construction sector is high, price growth is forecast to stabilize during the three years to 2017. This is a result of rising demand for plumbing construction services from major downstream industries, particularly new construction. Heightened demand, combined with continuous demand for maintenance and repair services on existing buildings, will reduce price volatility. Also according to IBISWorld research, low price volatility promotes a stable purchasing environment for buyers by allowing them to accurately budget and evaluate prices in the long run. Rising insurance costs and material prices will continue to pressure plumbing service providers' profitability in the three years to 2017. As a result, prices will increase during this period and weaken buying power.
A highly fragmented market encourages price-based competition among suppliers. The emergence of large-scale facilities maintenance companies has contributed to increased competition, which boosts buyer negotiation power. Moreover, steady demand for plumbing repairs contributes to a low risk of bankruptcy among suppliers, especially among facilities maintenance firms. This nature allows buyers to be more secure with negotiating long-term contracts. Although most companies are relatively small in this fragmented market, several major suppliers include Rescue Rooter, Chemed Corp., Comfort Systems USA and EMCOR Group. For more information, visit IBISWorld’s Plumbing Construction Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of plumbing construction services. Plumbing construction services include copper repiping, liquid and gas-conveying pipe work, septic system construction, sewer hook-up and connection building, installation and repair services for hot water systems, fire sprinkler and irrigation sprinkler installation and emergency repairs and maintenance services. Contractors might also supply parts (such as plumbing appliances, pipes and coupling products) as well as labor. This report excludes other specialized trade construction such as boiler and furnace construction; aqueducts, pumping stations, treatment plants, storage tank and sewer line construction; and heating, cooling and air conditioning (HVAC) construction 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
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.