The State of the Global Coatings Industry
The global recession of 2008 and 2009 has had a tremendous impact
on the coatings industry with all segments affected. However, the good
news is that the market now appears to be in recovery.
BY SCOTT DETIVEAUX
SENIOR CONSULTANT • ORR & BOSS
The economic downturn that began in late 2008 has had a significant impact on the global
paint and coatings industry. From
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. From 2007 to 2008
the market was essentially flat as the
dramatic decline in the fourth quarter
erased gains that had been realized
earlier in the year. The full impact of
the market decline, however, was felt
in 2009 as the market experienced
real decline of approximately two to
three percent in both volume and
value.
Orr & Boss estimates that total
global 2009 revenues for the paint
and coatings industry were approximately US$90 billion on a volume of
over 26 billion liters. In late 2010,
the International Paint and Printing
Ink Council (IPPIC) will publish a
new edition of its “Global Paint and
Coatings Industry Market Analysis
Report.” As with the earlier version,
IPPIC has retained Orr & Boss to
prepare this comprehensive, in-depth
market analysis. The coatings market data presented in this article follows the basic market segmentation
structure that is used in these industry reports.
While most economists believe that the worst of the economic decline is behind us,
recovery, however, remains fragile and will vary significantly by region. Overall, the
International Monetary Fund forecasts that the global GDP will grow by 5.7% in 2010
followed by an additional 4.8% in 2011. This will basically put the global economy in
2011 on par with economic activity of 2008.
MARKET OVERVIEW
Decorative coatings make up the
largest of the major coatings seg-
ments representing approximately
51% of the global volume and 44% of
the global coatings value. The impor-
tance of decorative coatings as a com-
ponent of the overall market has
actually grown as a result of the glob-
al recession. The percentage of the
coatings market made up of decora-
tive coatings has increased over the
past two years as industrial coatings
production has fallen. Global decora-
tive coatings, while declining in sales,
have done so at a lower rate when
compared to industrial coatings. The
industrial coatings market is com-
prised of nine sub-segments. General
industrial is the largest of these sub-
segments, comprising roughly ten
percent of the volume and 11% of the
market value. Powder, wood, trans-
portation, and industrial mainta-
nence and protective coatings are the
other large industrial sub-segments.
Chart 1 on the next page details the
market distribution of the industrial
sub-segments by volume and value.
The decorative coating segment has
declined at an annual rate of roughly
one percent in volume and value over
the past two years. Industrial coatings
have declined at more than double the
rate of decorative coatings. Within the
industrial sector, transportation, powder, wood and coil coatings have posted
significant declines since 2007. It is
important to note that while the market
as a whole has experienced decline,
there has been significant regional variation in terms of growth within the various major market segments. Coatings
markets in Western economies have
borne an inordinate share of the market
decline. The coatings markets in the
