Large retailers such as Home Depot and Wal-Mart have a major
influence on the prices consumer pay for architectural paint.
ration and adhesion. In addition, exterior deco manufacturers will have to consider entering new application
areas, such as heat management, to adjust to changes in
market share.”
One reason for flat or declining growth rates is due to
the growth of non-paintable surfaces/substrates. For
example, there has been a move away from wood in exterior accessories such as window frames, doors, soffits,
trim and shutters among others. There is also an overall
trend away from wood exterior construction. 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.
Vinyl is now by far the leading material of construction
in the region.
Another factor that continues to shape the market is
the price of raw materials as well as energy and transportation. “It is clear that raw materials prices have
increased and will keep increasing,” one coatings executive told Coatings World. “There is no secret in this
respect. In order to remain competitive these increases
need to be passed on to our customers.”
Companies appear to be making more advances in
their effort to curb skyrocketing costs by raising selling
prices and zeroing in on any fat that can be removed from
their processes. The goal: minimize the total cost of transforming a product from raw materials to finished goods
in their customer’s hands.
Other key trends shaping the market include tightening VOC regulations in many markets and increasing
globalization of competition both on the level of large construction projects as well as in the retail sector with big
box chains going international, which may offer growth
opportunities for global paint suppliers to the exterior
deco market.
Large retailers such as Home Depot and Wal-Mart
have a major influence on the prices consumer pay for
architectural paint.
Having a fortified stable of products that meets customer and regulatory demands is essential if a coatings
company is to thrive in the exterior paint market. Firms
are getting there via acquisition and in-house formulation efforts.
To create more robust products for exterior applications, there must be a strong focus on R&D and a willingness to experiment and utilize top-notch materials,
say industry leaders in the U.S. and overseas. CW
NEW STUDY PROJECTS GROWTH FOR U.S. PAINT DEMAND
According to a study from The Freedonia Group, U.S. demand for paint and coatings is expected to expand 3.1%
annually to $23 billion in 2012. Volume gains are projected to accelerate from the sluggishness of 2002-07, when
an economic slowdown—combined with high raw material costs and stringent environmental regulations—took
a toll on the U.S. paint and coatings industry.
The market share held by traditional solvent-based coatings will continue to erode as these products are
replaced by water-based, high solids, powders and other non-solvent coatings. Going forward, however, growth
will be aided by an improving outlook for both construction and manufacturing activity, the study projected.
Architectural paint represents the largest segment of the overall paint and coatings market, accounting for
approximately half of demand in both volume and value terms. The residential market will continue to account
for the vast majority of architectural paint demand and will benefit from rebounding growth in residential construction, as well as a significant turnaround in new housing starts through 2012.
Demand for interior paint will outpace that for its exterior counterpart, as demand for the latter will be
restrained by the ongoing popularity of siding materials. However, rapid growth in the use of fiber cement—a
paintable siding material—will bode well for exterior paint demand.
