Businesses will have greater access to credit and confidence to invest in new buildings, spurring demand from new construction and raising pneumatic tool prices further
Los Angeles, CA (PRWEB) December 18, 2013
Pneumatic tools have a buyer power score of 3.6 out of 5. This score reflects low market risks, moderate pricing trends and a somewhat favorable market structure. The main sources of demand for pneumatic tools are the construction, manufacturing and automotive sectors. After experiencing sharp downturns in 2008 and 2009, these industries have rebounded in the three years to 2013. As a result, demand for pneumatic tools has increased, giving suppliers leverage to raise prices. “As the economy improves in the coming years, businesses will have increased access to credit as well as confidence to invest and expand,” says IBISWorld procurement analyst Andrew Yang. “As a result, prices are expected to accelerate in the three years to 2016. In their negotiations, buyers should take action to lock in prices now.”
The market structure is moderately favorable for buyers. Instead of using pneumatic tools, buyers can instead purchase alternate power tools, such as hydraulic or electric tools. Electric tools are fairly similar to pneumatic tools and do not require an air compressor. The availability of these substitutes makes it difficult for suppliers to raise their prices too high, as buyers can turn to these substitutes instead. However buyer negotiating power is lowered by increasing market share concentration. “High market share concentration is negative for buyers because it limits the number of suppliers that can provide pneumatic tools,” adds Yang. “Market share concentration is expected to rise as companies engage in merger and acquisition activity.” Major suppliers in the market include Stanley Black & Decker Inc., Snap-on Inc. and Hitachi Ltd.
Low market risks increase buyer negotiating power. Although pneumatic tool manufacturers require critical inputs such as aluminum, steel and copper, these commodities are readily available from many suppliers all over the world. Additionally, bankruptcy risks are fairly low for most suppliers. For buyers, this means that they do not have to worry about disruptions in supply due to companies going bankrupt. In addition, profit margins are moderate for pneumatic tool suppliers, leaving room for buyers to negotiate lower prices. For more information, visit IBISWorld’s Pneumatic Tools procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of pneumatic tools. Pneumatic tools, also known as air tools, are handheld industrial tools powered by compressed air. This report includes air hammers, drills, grinders, wrenches, sanders, polishers and spray guns. The report excludes air compressors, air fittings and connectors as well as pneumatic cylinders.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Vendor Financial Benchmarks
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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.