Fast growth in construction has raised suppliers’ purchase costs and has allowed them to increase the markups on their services
Los Angeles, CA (PRWEB) January 15, 2015
Window and door installation services have a buyer power score of 2.7 out of 5. According to IBISWorld analyst Hayden Shipp, this score reflects moderate buyer power, which is the net result of the market's price trends, risks and structural characteristics.
Prices in this market have been rising because demand for window and door installation is heavily dependent on activity in the construction sector. The values of residential and nonresidential construction have grown quickly during the three years to 2014, as the economy has rebounded from the building slump that occurred during the recession. In addition, private spending on home improvements has risen considerably. These trends have allowed suppliers to apply higher markups, contributing to moderate price gains that have negatively affected buyers, continues Shipp. Additionally, the construction sector's high year-on-year growth rates have elevated this market's price volatility.
During the three years to 2017, prices are forecast to continue rising, although at a decelerated rate as the economy stabilizes and construction activity grows more steadily. Although further price increases will reduce buyers' purchasing power, prices are expected to decrease in volatility, which will make it easier for buyers to budget for market services.
Suppliers use a time-and-materials pricing model, which means that rising prices for wood paneling and windows, which are their main inputs, have also helped drive prices up. Additionally, this pricing model increases risk for buyers because they can incur costs associated with unexpected delays during installations. The market's high switching costs also limit buyer power and increase the importance of fully evaluating a supplier prior to contract entry.
Fortunately for buyers, high market fragmentation and mounting competition create a very large pool of suppliers from which to choose. Suppliers engage in competition on the basis of price and service quality to win new customers and gain market share in this nearly saturated market. As such, many suppliers typically bid against each other for contracts, improving the contract terms that buyers can secure. For more information, visit IBISWorld’s Window & Door Installation Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of window and door installation and erection services. Suppliers provide garage door and prefabricated window and door installation, entryway and exit framing, metal stud installation and store fixture installation 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.