Paint, Coating & Adhesive Manufacturers
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 1,300 paint, coating, and adhesive manufacturers in the US mix pigments, solvents, and binders into paints and other coatings; produce allied paint products, such as putties, removers, and cleaners; and produce adhesives, glues, and caulking compounds. Large companies may manufacture other construction-related products. Some large firms are vertically integrated and operate retail locations.
Regulation Of Hazardous Materials And Waste
Because the production of paint, coatings, and adhesives involves certain chemicals that are considered hazardous, manufacturers are subject to a wide range of laws and regulations dealing with environmental, health and safety issues.
Variability In Raw Materials Costs
The cost of raw materials used in paint, coating and adhesive production varies according to global market conditions.
Industry size & Structure
The average paint, coating, and adhesive manufacturer employs 50 workers and generates $36 million annually.
- The paint, coating, and adhesive manufacturing industry consists of about 1,300 companies that employ about 65,200 workers and generate about $47 billion annually.
- The industry is highly concentrated; the top 50 companies account for 73% of industry revenue.
- Some large firms are vertically integrated and operate retail locations.
- Large companies include PPG Industries, RPM International, Valspar, and HB Fuller. Large companies may generate a significant percentage of sales in foreign markets.
Industry Forecast
Paint, Coating & Adhesive Manufacturers Industry Growth
Recent Developments
Oct 4, 2024 - Lack of Affordability Dents Auto Sales
- High sticker prices and borrowing costs are keeping some potential car buyers away from dealers, according to The Wall Street Journal. US light vehicle sales were down 1.9% in the third quarter of 2024 compared to the same period in 2023, according to Ward’s Intelligence. While auto sales have been sluggish, they are expected to see a slight gain over 2023’s 15.7 million units. However, 2023 sales were hurt by lingering supply-chain disruptions. For the five years before the pandemic, US auto dealers sold about 17 million units per year. Affordability is a significant issue, experts say. In September 2024, the average new car price was $44,467, according to JD Power. While that is down about 3% compared to the same period in 2023, the average price of a new car in 2019 was $34,600. New light vehicle sales are a demand driver for paints, coatings, and adhesives.
- The total value of US construction put in place fell 0.1% in August 2024 compared to the prior month, according to the US Census Bureau. Residential spending declined 0.3% and nonresidential spending increased 0.1%. In the nonresidential buildings segment, growth was led by communication, which saw growth of 1.3%. Amusement and recreation spending increased 0.9%, and lodging spending rose 0.8%. Spending on public safety projects grew by 0.6%, and healthcare spending rose by 0.1%. Construction spending for office, manufacturing, and transportation each rose 0.1%. Commercial spending fell 0.5% in August, while educational and office spending fell 0.2% and 0.1%, respectively.
- Home builder confidence in the single-family market improved in September amid moderating mortgage interest rates, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose two points to 41 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. September’s gain in the HMI followed four consecutive months of declines. The HMI survey also showed that 32% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 5% was the lowest since July 2022. However, while the Fed’s recent rate cut will reduce the cost of land development and construction loans, builders are seeing increased competition from existing home listings in some markets.
- 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.
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