During the three years to 2017, the price of energy and utility consulting services has risen steadily at an estimated annualized rate of 0.9%. Low price volatility is largely due to the diverse range of downstream markets, providing stable demand.
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Human Resources Consulting
Increased hiring efforts as well as ongoing regulatory issues surrounding employee benefit plans and health insurance have all contributed to a rising need for HR consulting in the past three years, supporting price growth.
IT Consulting Services
Rapid supplier entry into the market has kept the IT consulting market fragmented and competitive, which has kept recent price growth in check. Buyers have also benefited from low price volatility, which enables buyers to better budget for their expenses and effectively time their purchases.
Management Consulting Services
Very little volatility has been occurring in the price of management consulting services during the period, helping buyers accurately forecast prices and time purchases.
Procurement Consulting Services
Despite price growth, buyers have been benefiting from low price volatility during the past three years. Suppliers’ primary input cost is wages, which have remained stable as a share of revenue. As a result, there has been little risk of significant input cost fluctuations, and suppliers have been able to maintain steady price trends.
Facilities Management Services
Demand for facilities management services has been growing during the period in line with increases in the number of businesses nationwide.
General Contractor Services
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.
Rising demand has been the primary contributor to recent price growth. Fortunately for buyers, stiff market competition has prevented janitorial service prices from rising more rapidly.
Security Guard Services
Large providers of security guard services have been raising their prices at a faster rate than the market average and have thus benefited the most from growing demand for services. These vendors’ diversified service offerings give them more room to implement price increases without risking a significant loss of business because their larger customers can still source multiple services from them and still save money.
Solid Waste Collection & Disposal Services
Recent price growth can largely be attributed to the rising cost of complying with new and changing regulations, such as landfill capping standards and changes to the Clean Air Act of 1970. These changes have been forcing haulers to invest in new collection trucks and other related operating equipment and machinery, thereby increasing their operating costs.
401(k) Administration Services
While input costs and demand drivers affect service prices, the price trend can be better attributed to the introduction of regulation forcing companies to disclose fees more clearly, which has then driven down service prices.
rising demand for services has been the primary driver of price growth in the past three years. The number of businesses determines the size of the pool of companies in need of accounting services and has risen as companies have gained cheaper access to capital.
Auditors have been deterred from adjusting rates for services too rapidly for fear that their clients may defect to competing firms. As a result, buyers have been able to budget accurately for purchases of audit services during the period.
Business Credit Card Services
APRs for business credit cards have risen an estimated 0.6 percentage points. As inflation has been rising and unemployment has approached its natural rate, the FOMC has started to increase the target range for the federal funds rate after nearly a decade of stagnancy.
A growing number of employees has added to the complexity of payroll, because businesses have had to do more back end work to integrate new workers into their operations. As a result, businesses have been compelled to outsource the administration of payroll to third-party processors, strengthening demand for payroll services.