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Price growth was largely supported by government stimulus that sparked a rise in construction and industrial production activity during the past three years; falling global demand for crude oil and natural gas will pressure price growth for directional drilling services during the next three years, but the market will still be supported by continued growth in the construction sector. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has added a report on the procurement of Directional Drilling Services to its growing collection of procurement category market research reports.
Los Angeles, CA (PRWEB) July 15, 2014
Directional drilling services have a buyer power score of 2.3 out of 5, indicating a market with low buyer power. Demand for construction activity plays a significant role in the price of market services. As such, increased demand, especially within the utilities sector, during the past three years fueled an upward trend in prices for directional drilling, says IBISWorld analyst Kiera Outlaw. Demand is forecast to remain stable over the three years to 2017 due to steady growth in downstream construction markets, especially regarding greater electric power consumption. The anticipated growth in demand will favor suppliers, because prices are forecast to continue rising, albeit at a slower rate than the past three years. Despite this trend, the market is characterized by a large number of small and medium-size vendors, which facilitates price-based competition to the relief of buyers. Major suppliers include AECON, Archer - The Well Company and Baker Hughes Incorporated.
In recent years, price-based competition has also been supported by the lack of federal licensing requirements, which has benefited buyers. Market share concentration is projected to rise in the coming years, though, due to increased merger and acquisition activity, continue Outlaw. This trend will allow the market to self-regulate by weeding out unqualified suppliers as they become unable to compete with larger, more qualified suppliers. The rise in demand for drilling has increased largely because directional drilling allows buyers greater access to scattered resources throughout the wellbore, which are otherwise difficult to extract. Meanwhile, the availability of substitute services is limited when penetrating the Earth's surface. The lack of viable substitutes weighs heavily against buyer's purchasing power because it restricts their ability to find other qualified service providers.
High price volatility has also been detrimental to buyers during the period. Sudden and significant changes in prices are disadvantageous for buyers, especially regarding their ability to accurately budget. As a result, buyers are encouraged to secure their drilling contracts now before prices rise during the three years to 2017. For more information, visit IBISWorlds Directional Drilling Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of directional drilling services. Service providers take measurements of geologic structures by strategically drilling under the surface of the Earth. These formation evaluation services aid in reservoir engineering, well placement and mining resource mapping. This report includes measuring while drilling (MWD) 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, IBISWorlds 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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