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 9700 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 20,800 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
Mar 25, 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 and some solid gains in the years following the onset of the pandemic. The industry’s year-over-year sales fell to -1.1% in 2020 before rising to 13.6% in 2021 and 14.6% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. In 2023, sales growth moderated to 5.5% and is expected to fall further to 0.7% in 2024 before rising an average of 1.5% per year between 2025 and 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
- The National Association of Home Builders (NAHB) expects the residential remodeling market to remain flat in 2024 compared to 2023, then grow by about 2% in 2025. Remodeling is supported by a lack of existing homes on the market, high homeowner equity, and the aging of US housing stock. However, finding skilled labor is still a challenge for remodelers.
- The total value of nonresidential building construction starts decreased a seasonally adjusted 16% in February from January, according to Dodge Construction Network. The drop was led by a 28% decrease in manufacturing projects. Commercial construction starts were off by 3% in February amid fewer warehouse starts, and institutional projects saw a 19% decline in starts amid weakness in the transportation and education buildings segments. Dodge Construction Network chief economist Richard Branch said, “Construction activity was hit hard by higher rates and more restrictive credit standards. Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays – especially in the manufacturing sector. While optimism should prevail in the second half of the year as the Federal Reserve begins to cut rates, some sectors like commercial, will make little headway over the remainder of the year.”
- Home builder confidence improved in March amid a lack of existing homes on the market and moderating mortgage rates that remained below 7%, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose three points to 51 in March 2024, which marked the highest HMI reading since July 2023 and the fourth consecutive month of strengthening confidence. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said that while lower interest rates have improved affordability and drawn more buyers back to the market, 2024 could bring supply-side headwinds, including shortages of workers, materials, and available lots.
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