Coatings World - February 2008

Wood Coatings

Market

Facing a number of challenges

including a slumping housing market

and VOC regulations, wood coatings

manufacturers continue to develop

new products and technologies for

interior and exterior applications for

the professional contractor and DIYer.

BY TIM WRIGHT EDITOR

Photo: Thompson’s Water Seal

To be successful in today’s market, domestic wood coatings manufacturers must overcome a major slowdown in the housing market and pro-actively develop products that meet or exceed government regulated VOC levels while offering consumers the same high level of quality wood finishes that they have come to expect. Additionally, the industry must continue to find new ways to attract new DIYers to the category by offering products that meet their needs and are easy to use.

Discussing the interior DIY market, Matt Moon, senior brand manager of interior wood care at Rust-Oleum, said during 2006-2007 the wood coatings market remained relatively flat.

“Possible explanations for this could be related to several factors, including a declining housing market, the choice of consumers to re-buy items rather than restore them or also the fact that consumers could be intimidated by the process of staining in general,” he said. “Rust-Oleum’s goal for 2008 and beyond is to grow the interior wood care market by releasing more user-friendly and innovative products that will entice more potential users while also tending

to the needs of our current customer base. In addition to the trend toward using products that are more environmentally friendly, a general trend in the wood coating category is a call for increased convenience when it comes to taking on a project.”

Also offering his opinion on the wood coatings market in general was Tom Dougherty, director of brand marketing, Pittsburgh and Porter Paints. “In spite of a larger array of competing substrates in the market, wood continues to hold its own,” he said. “In fact, we continue to see a growing demand for our exterior coating products that are typically applied to wood. The popularity of premium topcoats and exterior stains suggests growth in the use of wood. At the same time for a smaller segment of the market, interior use of wood will continue to be popular in upscale designs.”

MARKET SLUMP HITS
U.S. HOMEBUILDERS

It is no surprise that the U.S. housing market is going through a severe slowdown, with a sharp rise in mortgage defaults.

The U.S. Commerce Department said housing starts fell 14% to an annual rate

of 1.006 million in December, the weakest showing since May 1991.

For the 2007 full-year, housing starts plunged by a whopping 24.8% from 2006, the steepest decline since 1980.

Building permits, seen as a measure of future construction plans, fell 8.1% in December to an annual rate of 1.068 million, their lowest level since March 1993.

For the entire year, building permits dropped by 25.2% in 2007, the sharpest falloff in the gauge of future activity since 1980.

As new home sales and new construction slows, it factors into the wood care market. “If there are less homes being built, there are reduced surfaces to protect such as floors, railings and doors that would require the need and use for wood finishing products,” said Moon.

“Obviously, everyone is well aware of the slowdown in the housing market, both in new home construction and resales,” added Dougherty. “Any supplier that is involved in new home construction and repaint is being affected by this downturn. Hopefully we’ll see an upswing at some point in 2008.”