Paint, Coating & Adhesive Manufacturers NAICS 3255

May 30, 2025 - Remodeling Spending to See Moderate Growth

• Home remodeling spending is expected to see slight gains through 2026 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.8% to $505 billion in the second quarter of 2025 compared to Q2 2024. In the third quarter of 2025, remodeling spending will rise to $506 billion, up 1.4% from Q3 2024. Spending will then increase to $512 billion in Q4 2025, up 1.8% from Q4 2024. In the first quarter of 2026, year-over-year spending is forecast to rise 2.8% to a record $526 billion. Joint Center expects improvements to be supported by increasing home values, a steady labor market, and gradually improving existing home sales. However, uncertainty stemming from trade strife and waning consumer confidence could put downward pressure on remodeling demand.
• The number of building permits issued for single-family, privately-owned housing units decreased 5.1% in April 2025 compared to March and fell 6.2% year-over-year. Single-family housing starts dropped by 1.6% month-over-month and were down 12% compared to April 2024. Single-family housing completions declined 5.9% in April from the previous month and decreased 12.3% year-over-year. Housing starts in April were pressured by tariff-related economic uncertainty, high mortgage rates, and rising costs for building materials, according to the National Association of Home Builders (NAHB).

• Sales of existing US homes decreased by 0.5% in April from March and were down 2% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy. Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand." Existing home sales are a key demand driver for architectural paints as sellers make upgrades prior to putting homes on the market, and buyers often freshen paint before moving in.
• Demand for automotive paints and coatings may face headwinds as trade uncertainties weigh on vehicle demand. Trade tensions have cooled as the US and China reduced tariffs on each other’s imports, and auto components that are compliant with the US-Mexico-Canada Agreement remain duty-free. S&P Global Mobility expects total North American light vehicle production to rise by 163,000 units in 2025 to 14.18 million units. However, North American production is expected to see slight dips in 2026 and 2027 as trade policy uncertainties affect light vehicle demand.