Coatings World - October 2008

Business Corner

STRATEGIES & ANALYSIS

auto production is the fact that less square footage available to paint will exist per unit as the more gas-effi-cient shift in domestic autos down-sized and trucks are deemphasized in the overall marketing mix.

The coatings for major appliances will move sharply down through 2009, from nine percent below 2007 levels in 2008 to almost double that rate to 17% in 2009. This is only logical since appliance sales will follow housing starts, which are off over 33% this year.

New housing will continue to be weak, which in general, use lower quality PVA interior paint versus remodeled houses which use higher quality acrylic systems. The latter segment will increase slightly in units and even greater in value. This is important since in economic downturns more remodeling takes place in lieu of moving to or building a new house.

The local PPG dealer and friend, Joe Waldschmidt, reminded me recently that the Pinehurst/Southern Pines, NC area is atypical of many parts of the country since housing is not as depressed here. However, it has definitely slowed due primarily to retirees in the north being unable to sell their homes and retire, as planned, in the south.

Yes, this information is far from uplifting however, we must face the facts that for the foreseeable minimum of 24 months our businesses will not operate “as usual.” We must make painstaking changes and manage our businesses very carefully while we continue to take prudent risks. This period will be good for some and bad for others. The more fully integrated a company is the better positioned it is to withstand these negative change influences. That’s a no brainer!