LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global building materials market is expected to grow at a CAGR of 5.6% over the next five years due to strong global economic growth, increase in the commercial activities, and the rise in government spending on infrastructure development.
The research report titled ‘Global Building Materials Market 2017-2021: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“During the forecast period, the global building materials market will be driven by increasing rapid industrialization and urbanization which is giving a boost to the construction sector in both commercial and residential projects,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “In addition, increased government spending on infrastructure development and renovation will further fuel market growth,” adds Angad.
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Cost saving opportunities in the building materials market
The adoption of various cost-optimization levers helps buyers of building materials realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the building materials market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
New innovations such as programmable cement, self-healing concrete, thermal bridging insulation can help minimize building costs, sometimes up to 7% of total category spend.
Buyers seek building materials that have high material performance, low environmental impact, and can be reused, recycled, or disposed at the end of its life. This will result in a cost-efficient building solution.
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Optimization of supplier competition saving aspects
Technavio analysts suggest procurement of the right mix of services and price discounts based on value-added services and bundled services by suppliers.
Buyers seek good quality materials along with complete services, including transporting the materials to the site. Buyers look for readily available materials that ensure that they do not have to wait long to get materials. Therefore, buyers prefer materials that are locally sourced as this helps to save on shipping costs and avoid building delays.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global building materials market is the need for consolidation and unification of building activities. Organizations are looking to consolidate services such as logistics and installation of the machines required in the manufacture of building materials. Based on the type of material selected, buyers require specialized personnel for complicated installations.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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