A growing number of suppliers will help moderate price growth as demand and, thus, prices for building fireproofing services continue to rise alongside increasing construction activity.
Los Angeles, CA (PRWEB) December 21, 2014
Building fireproofing services have a buyer power score of 3.2 out of 5, reflecting fairly neutral market conditions for buyers and a moderate amount of buyer negotiating power. Factors increasing buyer power include a stable supply chain, very low market share concentration and little specialization within the service. Conversely, the absence of viable substitutes, high switching costs and rising prices negatively impact buyer power. “Demand for fireproofing services is closely tied to construction levels,” says IBISWorld procurement analyst Michelle Hovanetz. “As construction and renovation activity increases, buyers purchase more fireproofing services to protect their investments and promote the safety of employees and tenants.” As the economy has turned around and construction activity has begun to return to prerecession levels in recent years, demand for fireproofing services has grown, leading to rising prices. Prices are expected to continue rising in the coming years as construction levels remain high, negatively impacting buyers.
The lack of direct substitutes for building fireproofing services and high supplier switching costs also hinder buyer power. Buyers must typically pay the prevailing market price for services due to the lack of alternatives. “Once a buyer chooses a supplier, they are generally locked into a large portion of the costs related to the service, regardless of whether or not they decide to switch suppliers,” adds Hovanetz.
Many factors have positively influenced buyer power in recent years as well. Fireproofing services are fairly standardized, so most suppliers offer comparable services; this increases the level of competition in the market. In addition, there is low market share concentration among service providers, with the majority of suppliers operating as nonemployers or very small businesses. The total number of fireproofing service suppliers has increased in recent years in response to growing demand. This trend is expected to help increase competition and moderate price growth in the coming years. In addition, risk of price shocks due to supply chain problems is low. A stable supply chain, along with a wide variety of suppliers, ensures the availability of services, increasing buyer power. For more information, visit IBISWorld’s Building Fireproofing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of building fireproofing services. Building fireproofing services help buyers prevent fires from entering or spreading inside of their businesses, factories or warehouses. Services provided include intumescent and cementitious fireproofing and the application of spray-on foam insulation and customized coatings. Fireproofing services may be completed either as part of a renovation, general maintenance or new construction.
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.