Paint and Varnish Wholesalers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 940 paint, varnish, and supply wholesalers in the US act as middlemen between manufacturers and a variety of end users, including retailers, other wholesalers, collision repair centers, OEMs, and building contractors. Special purpose coatings, which include automotive paints, account for over 40% of industry sales. Architectural coatings account for one third of industry sales. Other products include architectural coatings, enamels, primers, stains, solvents, and lacquers; paint supplies (brushes and rollers); OEM coatings; and wallpaper and wallpaper supplies.
Dependence on Automotive Collision Repair Business
Because automotive paint and coating sales account for a significant percentage of the market, the industry is influenced by demand from the vehicle collision repair market, which consists primarily of small independent businesses.
Dependence on Construction Industry and Economy
Demand for architectural paint and coatings is dependent on the health of the construction industry, which is cyclical and influenced by economic conditions.
Industry size & Structure
The average paint, varnish, and supply wholesaler employs 20-22 workers and generates $7-8 million annually.
- The paint, varnish, and supply wholesale industry consists of about 940 firms that employ 20,000 workers and generate $7 billion annually.
- The industry is concentrated; the top 50 companies account for about 84% of industry revenue.
- Large automotive paint, body, and equipment (PBE) wholesalers include LKQ Corporation and FinishMaster (Uni-Select). Large manufacturers of paints and coatings include PPG, Sherwin-Williams, and RPM. Sherwin-Williams is one of the largest wallpaper distributors in the US.
Industry Forecast
Paint and Varnish Wholesalers Industry Growth
Recent Developments
May 24, 2024 - Industry Sales Growth to Remain Weak
- The paint and varnish wholesaler industry is expected to experience slower sales growth in 2024 after a softening of demand in 2023. The industry’s year-over-year sales growth was 7.4% in 2022, 2.8% in 2023, and is expected to further moderate to 1.4% in 2024, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth in the paint and varnish wholesaler industry is then projected to see average annual growth of about 1.7% per year between 2025 and 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Demand for building design services improved in April over the prior month, but architectural billings remain soft, according to a May report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 48.3 in April from March’s reading of 43.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 54.8 in April compared to 54.9 in March, and the index for the value of new design contracts decreased from 50.0 to 49.2. The AIA’s Chief Economist, Kermit Baker said, “Continued high interest rates make it difficult for some projects to move forward, but there is ongoing interest in pursuing these projects once conditions improve. In the meantime, design activity is expected to remain sluggish.”
- Multifamily developers’ confidence declined in the first quarter of 2024, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) fell three points in Q1 2024 to 47 compared to the first quarter of 2023. The Multifamily Occupancy Index increased by one point to 83 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include a tight lending environment, higher borrowing costs, and difficulties with getting projects approved. A large number of multifamily projects currently underway is expected to dampen starts. The NAHB expects multifamily starts in 2024 to drop by 28% as development activity declines.
- Sales of existing US homes decreased by 1.9% in April from March and were also down 1.9% year-over-year, according to the National Association of Realtors (NAR). High home prices and interest rates may be continued barriers to entry for some potential homebuyers. The median price for all types of homes in April was $407,600, up 5.7% from a year earlier. As of May 16, 2024, the 30-year fixed-rate mortgage averaged 7.02%, up from 6.39% for the same period in 2023. NAR chief economist Lawrence Yun said, "Home prices reaching a record high for the month of April is very good news for homeowners. However, the pace of price increases should taper off since more housing inventory is becoming available." Existing home sales help drive demand for home improvement spending. Homeowners often make renovations before putting their house on the market, and buyers typically do remodels and upgrades before moving in.
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