The State of the Global Coatings Industry
BY SCOTT DETIVEAUX
SENIOR CONSULTANT • ORR & BOSS
The current global economic downturn has affected virtually every
industry, including paints and
coatings. Over the period 2002 to 2007
the global paint and coatings industry
grew at an annual rate of nearly five
percent in terms of volume and nearly
seven percent in terms of revenue. The
market slowed significantly in 2008 and
is projected to be flat to declining for
2009. Orr & Boss estimates that total
global 2008 revenues for the paint and
coatings industry were approximately
US$93 billion on a volume of more than
27 billion liters.
In early 2008, the International Paint
and Printing Ink Council (IPPIC)
retained Orr & Boss to prepare a comprehensive, in-depth market analysis
entitled, Global Paint and Coatings
Industry Market Analysis Report (2007 –
2012). Coatings market data presented
in this article is based on the intensive
market research conducted for the completion of this study of the global paint
and coatings industry. For the purposes
of the IPPIC report and for this article,
the global paint and coatings industry
has been segmented into, studied and
presented according to the market sectors listed in Table 1 on the next page.
The recovery of the coatings market is inherently tied to recovery in the end-use
segments, and thus overall economic activity, construction and manufacturing. The
short-term forecast may indeed be negative, however, the medium- to long-term
prospects for the industry are much more positive.
MARKET OVERVIEW
Decorative coatings are the largest of the
major segments representing approximately 51% of the global volume and
43% of the global coatings value. The balance of the market is distributed across
the nine industrial market segments
with general industrial being the largest,
comprising roughly ten percent of the
volume and 11% of the market value.
Chart 1 details the market distribution
by volume and value of the industrial
segments.
Globally, the decorative coating seg-
ment has grown at an annual rate of
more than five percent in volume and
nearly eight percent in value over the
past five years. Similarly, industrial
coatings have grown more than six
percent annually in volume and
slightly more than seven percent in
value. Within the industrial sector,
powder coatings and industrial maintenance and protective coatings have
posted the highest average annual
growth rates both in terms of volume
and value. Packaging coatings and
automotive refinish have experienced
the lowest average growth rates. It is
important to note that there has been
significant regional variation in
growth rates within the various major
market segments.
Representing more than 35% of the
total global coatings volume, Asia-Pacific has become the largest geographic region. Europe is the next
largest region at nearly 30% of the
global volume. NAFTA trails Europe
and makes up 21% of the volume. The
balance of the market volume is split
between Latin America and the rest of
the world (ROW). Market distribution
based on coatings value varies from
the volume distribution. Europe is the
largest region in terms of coatings
value, representing approximately
35% of the market volume. Asia-Pacific
trails Europe and comprises roughly
31% of the global value. As with volume, NAFTA is the third largest
region making up approximately 24%
of the market. Latin America and
ROW split the balance.
ECONOMIC INFLUENCES
There are a number of factors that affect
coatings demand. Three major determinants are overall economic activity, construction levels and by the quantity of
specific end-use products manufactured
such as automobiles, furniture and con-
