Coatings World - June 2009

Stimulus Spending: Where’s the
Opportunity for Paints & Coatings, Part 1

BY PATRICK JONES, LYNDA GORDON, LINDA MARQUEZ & PHIL PHILLIPS
CHEMARK CONSULTING’S “FAST TRACK SOLUTIONS TEAM”

With consumers holding their breath while they wait for the next economic shoe to drop and businesses cutting costs and jobs to offset lost revenues due to the worldwide economic downturn, the U.S. government has taken bold action to jolt the economy through massive spending in several key areas. The American Recovery and Reinvestment Act (ARRA), or the Stimulus Bill as it is commonly referred to, was signed into law on February 17, 2009.

Reading through the large volume of pages of the “U.S. Stimulus Package” and sorting through the various promises and cross-promises to determine specific business opportunities is both interesting and time-consuming. To assist the specialty chemicals constituency, Chemark Consulting’s Fast Track Solutions Team has studied this bill in order to cull out its impact on the paints and coatings industry—from suppliers, formulators, down-stream distributors and end-users. The key general targets that represent opportunities for our industry are:

• Increased investment in the renewable energy industry by providing capital over the next three years to eventually double domestic renewable energy capacity;

• Implementation of the largest weatherization program in history by modernizing 75% of federal building space and more than one million homes; and

• The largest increase in funding for our nation’s roads, bridges and mass transit systems since the creation of the national highway system in the 1950s, as part of the $150 billion

The American Recovery and Reinvestment Act (ARRA), or the Obama Stimulus Bill, was signed into law on February 17, 2009. According to Chemark Consulting’s “Fast Track Solutions Team,” the stimulus package will increase demand for architectural, heavy-duty and OEM paints/coatings, adhesives, sealants, composites, plus their basic raw material ingredients.

investment in new infrastructure.

Spending will be stimulated at the federal, state and local agency levels, in addition to increased spending on military infrastructure upgrades. In addition, the stimulus bill was designed in part to have a direct and measurable impact on the home improvement market and new home construction through its “First Time Home Buyers Tax Credit” and “Neighborhood Stabilization” provisions.

The complete bill is available on the Federal government’s official stimulus bill website, www.recovery.gov. In addition, by going to www.recovery.org you

are directed to a site that tracks recovery spending by state and county. It also allows businesses to find stimulus projects in a particular region and even allows visitors to register to receive free notification of upcoming economic stimulus projects of interest.

To qualify which stimulus monies actually entered the economy during the month of April, a comparison of spending versus available funds was made. Chart 1 on the next pages highlights weekly spending versus available stimulus funds for the weeks of April 3, 10, 17 and 24.