Price growth for tool rental is expected to slow somewhat as construction activity peaks in the three years to 2017
Los Angeles, CA (PRWEB) January 29, 2015
The market for tool rental has a buyer power score of 2.8 out of 5. This score is a reflection of unfavorable pricing conditions in the market that have resulted in weakened bargaining power during the negotiation process. Daily rates for tool rentals have been increasing due to swelling demand from key buying industries. However, the low level of market share concentration and the market-based pricing model used in the market serve to aid buyers in the negotiation process. Suppliers in rental markets compete primarily based on price, so tool companies can only raise prices so high without losing customers. “By using one company's prices as leverage against another company, buyers will find that organizing favorable deals is possible,” according to IBISWorld business research analyst Scott Winters.
In the past three years, tool rental suppliers have seen mounting demand for their products stemming from rising construction activity. In addition, many suppliers have been increasing prices in an effort to recoup losses they experienced immediately after the recession. “IBISWorld expects demand for construction materials and equipment to continue rising in the three years to 2017, which will push prices upward during the period,” said Winters.
Risk in the supply chain related to the procurement of steel has also weakened buyer power. Tool and other equipment manufacturers use steel as a primary input in production. When steel prices rise, consequently, the added cost is passed down from second- to first-tier suppliers, effectively raising the price of tool rental for end users. Because prices are forecast to rise at a considerable pace in the three years to 2017, buyers are advised to purchase tool rentals under long-term contracts as soon as possible or risk facing higher prices in the future. Major vendors include United Rentals Inc., Home Depot, Sunbelt and Lowe’s. For more information, visit IBISWorld’s Tool Rental procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist renters of various professional tools. Suppliers rent a variety of professional-quality tools ranging from smaller hand tools to larger machinery. Commonly rented tools include carpentry tools, plumbing equipment, lawn and garden equipment, painting and texturing tools, pressure washers and jackhammers. Buyers can procure tool rental from small, local suppliers or large, national chains. This report does not include purchasing tools or equipment, nor does it include repairs.
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.