Los Angeles, CA (PRWEB) March 19, 2015

The buyer power score for general contractor services is 2.6 out of 5, which indicates that buyers’ ability to negotiate with suppliers in this market is limited. Due to strong growth in construction activity as well as growth in corporate profit, demand for general contracting services has increased in recent years. “With general contractors experiencing greater demand, services rates have followed suit (although competition among suppliers has helped temper price growth, which provided some relief to buyer power),” according to IBISWorld business research analyst Kiera Outlaw.

Buyer power is also hindered by the low availability of viable substitute services. All construction projects require some form of on-site management; therefore, the basic role of a general contractor cannot be replaced. “Buyers do have the option of securing a construction manager to oversee the project; however, construction management tends to be more costly than general contracting because construction management suppliers are involved in the project from start to finish, whereas general contractors are brought on board after designs have been finalized,” Outlaw says.

Despite price growth and the low availability of substitutes, some market characteristics have worked in favor of buyer power. Buyers have access to more than 10,000 potential suppliers, some of the largest of which are Betchel Corporation, CH2M Hill, Jacobs and URS Corporation, which allows them to pit suppliers against one another to obtain the best price. In fact, once buyers determine the quality and ability of potential suppliers to address their needs, buyers often choose the supplier with the lowest bid as their final choice. However, it is imperative that buyers assess the bid thoroughly to ensure all costs are accounted for and that there will be no surprise fees once construction commences. Buyer power has also been supported by low price volatility during the period, which allows buyers to secure their general contractor services with ease. Nevertheless, buyers should seek to secure their services now rather than later, as prices are forecast to climb at a faster rate in the three years to 2018. For more information, visit IBISWorld’s General Contractor Services procurement category market research report page.

IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of general contractor services. General contractors oversee the entirety of a commercial, industrial or residential construction project. In performing a job, general contractors are responsible for providing all materials, labor and equipment and overseeing the job’s completion. Service providers are often responsible for assessing a project site and determining the cost to perform the desired work. If necessary, general contractors are also responsible for subcontracting and managing specialized work, including carpentry, plumbing, electrical and mechanical projects. This report excludes program management services.

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
Market Profitability
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.

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