- Tags : Facilities Management | General Contractor Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - General Contractor Services
During the three years to 2017, the price of general contractor services has increased an estimated 2.0 percentage points. This substantial rise in prices has largely resulted from a strong resurgence in construction activity, which has in turn been supported by low interest rates.
The value of construction has been rising strongly in the past three years, fueled in part by low interest rates, which have encouraged businesses to invest in construction projects. These factors have led to an increase in demand for general contractor services, which has incited price growth and hindered buyer power. Additionally, growth in the cost of construction inputs, such as cement, has contributed to price growth. Although steel prices have been falling during the period, cement prices have been growing and supporting rising purchase costs for suppliers. In turn, suppliers have passed their higher costs to buyers in the form of higher prices.
However, suppliers must constantly vie to win construction bids. Buyers can leverage the substantial availability of alternate suppliers to obtain the best price. The resulting high level of market competition has forced suppliers to keep price growth steady. As a result, buyers have been benefiting from low price volatility during the period, despite fluctuations in demand for contractor services. Low price volatility reduces the risk of price shocks and allows buyers to better budget for market services. Nevertheless, prices are expected to continue climbing in the three years to 2020, so buyers are encouraged to secure services sooner than later.
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