Moderate price growth is forecast to continue during the three years to 2017 as suppliers’ input costs and demand grow similarly to the past three years
Los Angeles, CA (PRWEB) February 26, 2015
Forklift rental services have a buyer power score of 3.4 out of 5, indicating that buyers have a moderate level of negotiation power. This market's low concentration boosts buyer power because it ensures that competition among suppliers is high. Additionally, the large number of suppliers in the market increases buyers' choices and allows them to shop around and compare options from a number of suppliers. Buyer power is also improved due to an availability of discounted rates, which are awarded through locking in annual rates or renting in bulk. Furthermore, moderate substitute availability benefits buyers. “Buyers can lease or purchase forklifts to decrease total cost of ownership if they determine that their needs are steady enough,” according to IBISWorld business research analyst Hayden Shipp.
However, recent price growth detracts from buyer power. Demand heavily influences rental prices, and growth in industrial production, construction activity and business openings have helped raise demand for forklift rentals. Additionally, forklift users' preferences are shifting toward renting instead of buying because renting frees up capital, allows users to avoid repair and maintenance costs, provides flexibility regarding fleet size and composition and offers access to the latest machines. As such, significant demand growth has helped pressure prices upward at a moderate rate. Rental companies' purchase costs have also risen, contributing to price gains. New emission standards have increased manufacturers' research and development expenditure, elevating the price of forklifts. Higher prices for new forklifts have increased the cost for vendors to update their equipment fleets, and these costs have been passed to buyers in the form of higher rental rates.
“Rental price growth will continue to restrict buyer power in the next three years,” says Shipp. Price gains for new forklifts are forecast to persist, as is the general preference shift toward renting. Fortunately for buyers, market fragmentation and the unspecialized nature of rental services will ensure that the pool of potential suppliers remains large. As such, switching costs will continue to be low, reducing buyers' dependence on a particular supplier. Major vendors include United Rentals Inc., Sunbelt Rentals and NES Rentals Holdings Inc. For more information, visit IBISWorld’s Forklift Rental procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers looking to rent forklifts, which are used in construction, retail, manufacturing and industrial settings. For the purpose of this report, the term buyer refers to any party looking to rent forklifts. This report includes telescopic handlers and narrow-aisle, rough terrain and warehouse forklifts. This report excludes rental services for other heavy machinery and equipment such as cranes, aerial lifts and earthmoving machinery.
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.