The anticipated rebound in the economy will continue driving prices in the next three years, primarily due to expected growth in the construction sector
Los Angeles, CA (PRWEB) February 23, 2015
Nondestructive testing (NDT) services have a buyer power score of 3.1 out of 5, which indicates moderate purchasing power for buyers. A moderate level of supply chain risk, financially stable vendors, a high level of product specialization and moderate market share concentration all characterize the market for NDT services. In combination, these factors foster a mixed purchasing environment for buyers. “Although prices of NDT services are historically high and are projected to continue growing over the next three years, price volatility is low, providing buyers a measure of assurance that service prices will not swing drastically,” according to IBISWorld business research analyst Scott Winters.
Operating inputs for NDT services include chemicals, testing equipment and computers, which pose moderate risk on average. As such, buyer power is hampered because suppliers keep prices elevated to hedge against sudden price spikes. However, buyers benefit from the low risk of input shortages and service disruptions stemming from vendor financial difficulties. “The average financial stability of vendors allows buyers the opportunity to nurture long-term relationships through which suppliers are typically more willing to negotiate contracts for guaranteed sales,” said Winters.
At the same time, qualified suppliers wield significant control over the market due to the high level of specialization required of NDT services. NDT services must not only be customized for different buyer needs, but must also adhere to strict quality and safety standards. Combined with a medium level of market share concentration, buyers have a limited number of qualified suppliers from which to choose, thus reducing buyer power.
Due to the further increase in price expected over the next three years as the economy improves, buyers are encouraged to enter long-term contracts with suppliers. As the rebounding value of construction, greater level of industrial production and skyrocketing new car sales support demand for NDT solutions, prices are anticipated to increase, hampering buyer power. Buyers will wield the greatest negotiating power by eliciting multiple bids to facilitate price competition and by locking in prices through longer-term agreements. Major vendors include Team Industrial Services, Rockwood Service Corporation, Mistras Group Inc. and SGS SA. For more information, visit IBISWorld’s Nondestructive Testing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of nondestructive testing services (NDT services) for the purpose of metal finishing. Suppliers provide nondestructive testing services on metals through eddy current inspection, visual inspection, magnetic particle inspection, ultrasonic testing services and positive material identification methods, among others. These services detect instabilities and recognize failed components, while also ensuring the quality of the metals (i.e. physical and chemical properties) and compliance for castings, welds, forgings and other products without permanently altering them. This report excludes nondestructive examination equipment.
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.