Water Well Drilling Services Procurement Category Market Research Report from IBISWorld has Been Updated

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Water well drilling services have a buyer power score of 2.0 out of 5, indicating unfavorable conditions for buyers due to significant increases in construction activity as well as adverse weather patterns in states that heavily use groundwater contributing to a significant rise in demand for drilling services during the past three years. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Water Well Drilling Services in its growing collection of procurement category market research reports.

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During the past three years, severe droughts in states with high groundwater extraction rates have increased demand for market services, boosting price; additionally, high growth in the value of construction has helped raise demand and price

Water well drilling services have a buyer power score of 2.0 out of 5, indicating unfavorable conditions for buyers. “Adverse weather patterns in states that heavily use groundwater have contributed to a significant rise in demand for drilling services during the past three years. California and Texas, which together account for about one-quarter of the nation's groundwater withdrawals, have experienced severe and persistent droughts during the period. In these states, private markets for groundwater have become larger, water prices have soared in agricultural areas and property owners have increasingly sought access to the water beneath their land,” according to IBISWorld business research analyst Hayden Shipp. Additionally, a handful of other states that rely heavily on groundwater (e.g. Nebraska, Idaho, Kansas and Colorado) have been drought stricken during much of the period. Rising demand in the largest regional markets for well drilling services has pressured the average price upward.

Significant increases in construction activity have also bolstered demand for water well drilling. Residential, nonresidential and water supply infrastructure construction have increased at moderate-to-strong rates during the past three years, indicating a heightened need for water wells for private residences, commercial users and municipalities. The period's substantial increases in residential and nonresidential construction are also linked to higher demand for geothermal boreholes for heating and cooling systems. Additionally, because groundwater satisfies about one-third of public water demand, steady population growth has required increased well drilling. As such, construction and population trends have led to higher market prices.

This market's substantial price increase has been accompanied by lengthy lead times in areas where demand outstrips supply. For example, buyers in California's Central Valley are facing lead times as long as 10 to 12 months in 2014; spots in suppliers' waiting lists sell for as much as $10,000 in private markets. Buying conditions vary considerably based on local market conditions, though,” Shipp says. Buyers in regions with lower demand benefit from above-average buyer power.

Market share concentration is low for water well drilling services, with the top four suppliers (Layne Christensen Company being number one) generating less than 10.0% of market revenue. The large number of suppliers, at about 8,500, and their generally small size reflect this market’s fragmentation. About half of all suppliers employ fewer than five people, and 85.0% of suppliers employ fewer than 20 people. For more information, visit IBISWorld’s Water Well Drilling Services procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of water well drilling services. Suppliers design, drill, electronically log, complete and develop water wells. They also provide and install pumps for wells and drill geothermal boreholes for heating and cooling systems. This report does not include oil and gas drilling services.

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
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
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.

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Gavin Smith
IBISWorld Inc.
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