Coatings World - October 2008

repaint opportunities,” he said. “The exterior market is driven by performance and by new construction or rehabilitation. It’s the difference between DIY and residential contracting versus major capital intensive new construction. This trend is especially true in the more developed economies of North America and Europe but holds true globally.”

Coatings companies closely watch housing data as it is a key indicator of the coatings market, according to Scott Detiveaux, a senior consultant at Orr & Boss. “However, the housing market has a much greater impact on the interior coatings market,” he said. “For example, since 1982 less than 25% of the houses built in the U.S. were constructed with wood siding. Over the past ten years only, less than ten percent of all houses built had wood siding.”

The most critical short-term challenge facing exterior deco manufacturers is the decline in residential new construction in the U.S. and in Europe. A trend that will persist for at least another 18-24 months, Foscante said. “Any recovery will be gradual and will not return the market segment to the exceptional growth levels that occurred in the 2004-2006 period,” he said. “Exterior deco manufacturers will have to adjust their cost basis in their supply and distribution chain to accommodate this new reality.”

To keep afloat, technologically exterior deco suppliers

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The loss of paintable surface is contributing to declines in the exterior deco market. Twenty years ago more than 40% of all new homes built in the U.S. had exterior wood siding. Today less than ten percent of new homes in the U.S. are built with wood siding.

will have to shift focus. “More product development attention will have to be placed on issues of sustainability and performance enhancements such as greater dirt pick-up resistance and weatherability,” said Foscante. “Deco paint suppliers will also have to adjust to the shift away from traditional materials of construction such as wood toward composites and plastics. This will necessitate modifying approaches to application, surface prepa-