The price of asphalt paving services has increased during the past three years due to rising wage costs and an uptick in demand brought on by recovering construction markets
Los Angeles, CA (PRWEB) January 16, 2015
Asphalt paving services have a buyer power score of 2.4 out of 5. This score signifies that buyers have moderate level of negotiating power in the market. Buyers derive power primarily from the low level of market share concentration and moderate specialization. However, the low availability of substitutes negatively impacts buyer power.
A wide range of contractors perform asphalt paving services. Therefore, buyers can look to multidisciplinary construction firms, such as Granite Construction Inc. or Lane Construction Corporation, to procure these services. “Buyers can also procure services from locally based service providers or paving specialists, which often provide only niche services under the asphalt paving umbrella,” according to IBISWorld business research analyst Deonta Smith. Although small operators and paving specialists (such as US Pavement Services Inc., General Pavement Management Inc. and Rose Paving Co.) make up the majority of service providers, larger multidisciplinary construction firms have gained market share by dominating specific markets (e.g. commercial construction, industrial construction, highways and utilities). Nonetheless, the wide availability of service providers expands the range of asphalt paving service contractors from which a buyer can choose, thus improving buyer power.
Likewise, the moderate specialization of asphalt paving services benefits buyers. “Some buyers require slightly customized solutions, given their particular environments and uses for the paved surface, but overall, project requirements will not vary noticeably. As a result, any operator, regardless of technological capacity, can fulfill most project needs, further expanding a buyer's options when selecting a vendor,” Smith says.
Alternatively, there are several factors that work against buyers of asphalt paving services. For example, the lack of substitutes for the services narrows the buyer's scope of alternatives. If a buyer is not satisfied with the firm that serves their operating sector, procuring services from a concrete paving service contractor might be the only other option. Despite this factor, considering this alternative can help buyers obtain leverage by creating competition during the negotiation process. For more information, visit IBISWorld’s Asphalt Paving Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of asphalt paving services. Paving specialist and multidisciplinary construction firms pave a variety of surfaces with asphalt, including parking lots, driveways, walkways and shopping and retail centers. Many service providers also offer asphalt resurfacing, patching, sealcoating and crack sealing services. Asphalt paving services are procured by a wide range of buyers, including residential, nonresidential and other structure foundation contractors. This report excludes road and highway maintenance 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
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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.