Paint demand will improve as manufacturing and construction markets revive
Los Angeles, CA (PRWEB) July 17, 2012
The Paint Manufacturing industry plays an important role within specific sectors of the economy because they provide protective and decorative finishes for many US products in various end-use markets. For instance, the construction sector needs paint for the houses and commercial buildings it constructs, and the manufacturing sector requires paint for certain products, particularly cars and boats. “While paint is essential to many industries, paint manufacturers remain vulnerable to economic shifts,” says IBISWorld analyst Radia Amari. “In the five years to 2012, revenue has decreased at an average annual rate of 0.7%; however, this decline has not been constant.” When the housing market declined from its peak in 2005, contractors and builders slowly reduced their paint purchases. When the subprime mortgage crisis began and consumer spending declined, many downstream buyers of paint, such as the manufacturing sector, reduced production, and so their demand for paint and coatings fell. In 2010, the economy began to recover and manufacturing increased, boosting paint sales.
In addition to shifts in demand, the industry has endured high raw material costs and strict government regulation. These challenges remain constant in 2012. Nevertheless, the economy has continued to grow, and in 2012 industry revenue is expected to increase 1.9% to $24.0 billion. According to Amari, the Paint Manufacturing industry has a low level of concentration, reflecting its fragmented nature and the existence of a large number of small mom-and-pop paint formulators, though many of these are gradually disappearing as consolidation continues. Within the architectural coatings segment alone, there are more than 500 companies, many of which are small regional or local producers. Current major companies include PPG Industries Inc., The Valspar Corporation and The Sherwin-Williams Company.
In the five years to 2017, the industry is projected to experience stable growth. As the economy expands and consumer spending increases, downstream customers will increase production and purchase more paint. Rising demand from key purchasers, like car manufacturers and residential builders, will boost demand for industry products. While revenue is projected to increase in the next five years, firm numbers are expected to decrease. Some firms have already exited the industry because of their financial struggles during the recession. Other companies will likely partake in mergers and acquisitions. With rising costs from new government regulations and expensive raw materials, companies will focus on improving their efficiency by acquiring other firms to increase economies of scale. As a result, enterprise numbers are anticipated to decrease in the five years to 2017. For more information, visit IBISWorld’s Paint Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures various paints, timber finishes and other surface coating products to decorate and protect surfaces against wear, weather and corrosion. Key products include paints, varnishes, lacquers and stains. Other products include fillers, wood fillers, putties and prepared paint thinners and removers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772