Corporate profit and the number of business will continue to rise steadily, driving demand and prices for inspection services
Los Angeles, California (PRWEB) March 24, 2015
The building inspection services market has a buyer power score of 2.4 out of 5, reflecting market conditions that are somewhat unfavorable for buyers. According to IBISWorld market research analyst, Daniel Krohn, "The low buyer power score is primarily a result of rapidly rising demand and a low availability of substitutes."
In the three years to 2014, the economy has been growing. Consequently, corporate profit, the number of businesses and the value of construction have increased. Improved economic conditions have also caused office rental vacancy rates to drop, indicating that building space is becoming increasingly occupied. Together, these trends have caused demand for building inspection services to grow substantially and given suppliers additional pricing power. In particular, federal and state regulations often make these services nondiscretionary, and there are no viable substitutes that buyers can switch to when market prices rise.
Nonetheless, the building inspection services market has very low concentration. "Suppliers must travel to the buyer's site to provide their services and must possess an in-depth knowledge of regulations within the buyer's area," says Krohn. These requirements create geographic barriers that prevent suppliers from reaching remote buyers. In turn, top-tier suppliers have difficulty capturing significant market share, which tempers their power in the market. Thus, low market concentration has helped preserve some buyer power.
Despite having somewhat low overall buyer power, buyers are likely to be able to leverage long-term contracts to obtain price discounts and shield themselves from rising market prices. Suppliers generally carry very high profit margins, which affords them considerable price flexibility. Moreover, given their low market share, suppliers have a strong incentive to pursue long-term contracts to retain buyers. Thus, suppliers are generally not only open to long-term contracts but are often willing and able to lower their prices to encourage them. For more information, visit IBISWorld’s Building Inspection Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of building inspection services. Building inspectors evaluate the structural integrity of a property and provide cost estimates on areas of concern or areas that require maintenance. Building inspection companies include franchised operations, sole proprietorships and part-time contractors. This report focuses exclusively on commercial building inspections and excludes new building construction and alterations. The report also excludes home inspection services and other specialty inspection services, such as power line, plumbing, sewer or acoustics inspection 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.