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
Jul 24, 2024 - Remodeling Index Weakens
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the second quarter of 2024 was 65, down one point from Q1 2024, according to a July 2024 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the second quarter, the Current Conditions Index portion of the RMI fell one point to 73. The Future Indicators Index component of the RMI also dropped one point to 58 compared to Q1 2024. The NAHB noted that most remodelers continue to see steady demand, although some have reported slowdowns. Some wealthy homeowners are paying cash for remodeling projects amid high interest rates.
- 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.
- Total nonresidential building construction spending is projected to rise 6% in 2024 over 2023, according to FMI’s third-quarter 2024 North American Engineering and Construction Outlook. With growth of 28%, public safety will lead 2024 nonresidential building construction, followed by manufacturing (21%), educational (7%), and religious (7%). Some other segments of the nonresidential building sector face headwinds. Commercial construction spending is expected to decline 7% in 2024 amid weaker demand for warehousing space, high interest rates, and tighter lending standards. Lodging construction spending is forecast to drop 6% as consumer budgets tighten and hotel occupancies wane, especially near the market's lower tier. Stubbornly high office vacancies will continue to weigh on new office construction, which is projected to see flat spending in 2024. Despite high interest rates, single-family construction spending is forecast to rise 7% in 2024 as homebuilders reduce home sizes to improve affordability. Spending for multifamily is expected to decline by 1% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 4% in 2024 as homeowners primarily focus on maintenance and repairs amid high materials costs and interest rates.
- Demand for automotive paints and coatings may dip as North American light vehicle demand softens. In July, S&P Global Mobility downwardly revised its 2024 outlook for North American light vehicle production to 15,682,824, down 125,000 units from a previous estimate. S&P Global Mobility said the Detroit 3 automakers are trimming production as inventories have piled up. The outlook for 2025 was also revised down by 1.6% as automakers' excessive inventories are expected to persist into next year.
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