Paint, Coating & Adhesive Manufacturers NAICS 3255

Jun 2, 2026 - Remodeling Spending to Slow Early Next Year

• Home remodeling spending growth is expected to slow significantly early in 2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in May by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 1.8% to $516 billion in the second quarter of 2026, compared to Q2 2025. In the third quarter of 2026, remodeling spending will trend slightly upward to $518 billion, up 2.4% from Q3 2025. Spending will then remain flat at $518 billion in Q4 2026, up 1.8% from Q4 2025. In the first quarter of 2027, year-over-year spending is forecast to rise just 0.5% to $523 billion. Remodeling permitting and building product sales have remained flat recently, but homeowners are expected to maintain spending near 2025 levels. Remodeling spending is likely to remain subdued, barring a turnaround in the construction sector.
• The Wall Street Journal reports that in May, AkzoNobel rejected a roughly 12.49 billion euro takeover bid from Nippon Paint and Sherwin-Williams, choosing instead to pursue its planned merger with Axalta Coating Systems. The decision underscores ongoing consolidation pressures in the global paint and coatings industry, where companies are seeking scale, portfolio breadth, and geographic reach to compete across decorative, industrial, and specialty segments. Akzo said the offer, which included a proposed breakup of its business, undervalued its long-term prospects and was subject to regulatory uncertainty. The bid represented a 39% premium to Akzo’s prior closing price. Akzo’s boards reaffirmed support for the all-stock Axalta deal, while Nippon Paint and Sherwin-Williams did not comment.

• Rising geopolitical tensions involving Iran threaten to disrupt global oil flows, particularly through the Strait of Hormuz, a critical transit point for roughly a quarter of seaborne crude. Any sustained disruption is likely to increase oil and petrochemical prices, directly raising input costs for paint, coatings, and adhesives manufacturers, which rely heavily on petroleum-based resins, solvents, and additives. Higher energy and freight costs would further pressure margins, while supply volatility could strain procurement and production planning. Although many producers may attempt to pass through price increases, success will vary by contract structure and end-market demand. At the same time, elevated oil prices could slow global economic activity, reducing demand from key sectors such as construction, automotive, and industrial manufacturing. Overall, the conflict presents a downside risk to profitability, with cost inflation, supply disruptions, and potential demand softness weighing on industry performance.
• The rapidly rising age of US owner-occupied homes may drive current and future demand for architectural paints and coatings. The US owner-occupied housing stock continues to age, with the median home reaching 42 years in 2024, up from 31 in 2005, according to the National Association of Home Builders' analysis of the Census Bureau's most recent American Community Survey. About 47% of homes were built before 1980, reflecting decades of underbuilding, especially since the Great Recession. New construction has struggled to keep pace due to high material costs, labor shortages, and elevated interest rates. From 2020 to 2024, just 4% of current homes were added, while the share of newer homes fell from 18% in 2014 to 13% in 2024. Over the same period, the share of homes at least 45 years old rose to 47%. This trend is expected to drive increased demand for remodeling, repairs, and upgrades nationwide.