Paint, Coating & Adhesive Manufacturers NAICS 3255

Feb 2, 2026 - Nonresidential Building Spending to Remain Sluggish Through 2027

• Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction is expected to rise just 1% in 2026 and 2.2% in 2027. For the next two years, commercial facility growth will be led by data centers, with spending rising 26.3% in 2026 and 16.5% in 2027. However, offices are expected to see a sharp decline in spending over the forecast period while warehouse and retail will see weak growth this year and modest gains in 2027. Manufacturing construction spending will fall 3.9% in 2026 and drop 2.8% next year. Spending on institutional projects will grow 2.7% this year and 2.8% in 2027, led by steady growth in the health sector, but educational, and amusement and recreation project spending will remain relatively flat.
• Home remodeling spending growth is expected to moderate in 2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 2.9% to $527 billion in the first quarter of 2026, compared to Q1 2025. In the second quarter of 2026, remodeling spending will trend downward to $518 billion but still be up 2.1% from Q2 2025. Spending will then moderate further to $517 billion in Q3 2026, up 2% from Q3 2025. In the fourth quarter of 2026, year-over-year spending is forecast to rise 1.6% to $522 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and elevated interest rates.

• Demand for automotive paints, coatings, and adhesives may soften amid an anticipated drop in global light vehicle production in 2026. Three key issues are expected to shape the global auto industry in the coming year: uncertainty stemming from shifting US trade and tariff policies, China's ascending auto sector at home and abroad, and demand shifts in the EV market, especially in North America and Europe, according to S&P Mobility. North American light vehicle production is forecast to contract by 0.8% in 2026 as the industry grapples with margin pressures driven by demand for lower-priced models. Asian brands are expected to continue emphasizing exports to North America despite tariffs.
• The Netherlands' AkzoNobel, maker of Dulux paint, will merge with Philadelphia-based Axalta Coating Systems in a $25 billion deal, creating one of the largest global coatings suppliers, according to Reuters. The combined company, expected to generate $17 billion in annual revenue and $600 million in cost savings, will focus heavily on coatings, which are more resilient than decorative paints in consumer downturns. For wholesalers, the merger signals greater consolidation, stronger bargaining power, and a streamlined product portfolio with higher margins, which may alter supplier relationships and pricing structures. The deal positions the new entity to exert more influence over wholesale distribution channels. The transaction highlights the industry's pressures from tariffs, rising costs, and increased competition.