A surge in construction activity and strong growth in corporate profit have increased demand and prices for fence and gate construction
Los Angeles, CA (PRWEB) January 12, 2015
The fence and gate construction market has a buyer power score of 2.3 out of 5. According to IBISWorld analyst Kiera Outlaw, buyer power has been restricted due to the surge in construction activity, which has increased demand for fencing and accelerated price growth in the process. In the three years to 2014, fence and gate construction prices have risen, and prices are forecast to continue climbing through 2017. Moreover, the lack of viable substitutes has also impeded buyer power during the period. Although buyers have a range of different fencing materials to choose from, there is no substitute for perimeter fencing aside from not having a fence at all.
Some market characteristics have been working in favor of buyer power, though. Namely, with about 90,000 suppliers to choose from, buyers are exposed to low market share concentration. This factor has led to intense price-based competition in the fence and gate construction market, despite the strong growth in prices. In fact, the intensity of price-based competition among suppliers has offset stronger price growth during the period. Moreover, continues Outlaw, the low level of product specialization within the market aids buyer power because it gives buyers greater access to a large number of suppliers within their area and allows them to more easily compare prices.
Low market share concentration and product specialization have benefited buyers during the period, but buyers have been somewhat negatively affected by the price trend. In fact, buyers have been exposed to moderate price volatility during the period, leaving buyers at risk for sudden price increases. Buyers can offset the volatility by establishing contractual agreements that lock in current rates. Although medium profit levels among suppliers will make it difficult for buyers to negotiate lower prices, suppliers will be more flexible when services are bundled or higher-margin products are requested. For more information, visit IBISWorld’s fence and gate construction procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of fence and gate construction services. Contractors install galvanized or colored chain-link fences, as well as vinyl, wood and ornamental iron fences for industrial, commercial and residential applications. This report does not cover fence rental and excludes invisible electric fences.
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.