The construction sector is poised for strong growth in 2016. With an improving economic outlook and more available cash on hand, businesses will continue their expansion plans, thereby bolstering overall construction activity. Swelling demand for new healthcare and educational facilities, offices, hotels and retail stores is projected to strengthen construction activity in the commercial building market.
As a result of this surge in demand, prices for a number of construction services are projected to increase rapidly. For example, the price of plastering and drywall services, which are widely used in commercial and construction projects, is forecast to jump 7.7 percent in 2016, according to IBISWorld. Similarly, prices for painting services and landscape architecture and design services are anticipated to increase 5.9 percent and 3.4 percent respectively in 2016.
IBISWorld has made the full data available in their media center.
In addition to skyrocketing demand, higher prices for raw inputs such as gypsum building materials, coatings and paint will further propel price growth for construction services as suppliers seek to compensate for heightened purchase costs.
While buyers cannot completely avoid future price hikes, they can reevaluate their purchasing strategies to maximize cost savings. In fragmented markets with high competition, buyers can pit suppliers against one another by sourcing multiple bids, including blind bids, to elicit more competitive prices. In order to lock in lower prices, buyers should consider purchasing these services sooner rather than later or entering into contract agreements.
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