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 65,600 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 31, 2024 - Outlook Mixed for Nonresidential Construction Spending
                                  • The value of US commercial construction starts is expected to be mixed in 2024, depending on project type, according to a recent forecast by Dodge Construction Network. Marking a potential record level of activity for the sector, manufacturing construction will rise 16% to $112 billion in 2024, supported by the CHIPS and Science Act and the Inflation Reduction Act. Amid a pullback in planned investments by major warehouse builders Walmart and Amazon, the value of warehouse construction is expected to decline 11% in 2024 to about $44 billion. Low occupancy and weaker demand will reduce office construction spending to about $37 billion in 2024, down 6% compared to 2023. Office projects will be mostly confined to alterations to existing buildings. Speculative office construction, where offices are built before securing a tenant, has become less common.
                                  • Demand for automotive paints, coatings, and adhesives may hold steady, but the 2024 outlook for light vehicle demand is uncertain. According to S&P Global Mobility, US light vehicle sales are forecast to reach 15.9 million units, about 3% higher than 2023. In a late-January outlook, S&P Global Mobility’s principal analyst, Chris Hopson, said, "Auto consumers continue to be impacted by an uncertain purchase environment. While positive developments regarding mildly retreating vehicle prices, rising inventory, and incentive levels bode well, interest rates remain high, and economic headwinds remain. A volatile purchase environment for auto consumers will continue to dictate monthly sales levels."
                                  • Demand for building design services was flat in December compared to the prior month, according to a January report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 45.4 in December from November’s reading of 45.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 53.1 in December compared to 56.9 in November, and the index for the value of new design contracts increased to 50.0 from 48.1. The AIA’s Chief Economist, Kermit Baker said, “Billings at firms declined for eight months of the year, and the last four months saw this overall weakness accelerate. Fortunately, project backlogs at firms eased only slightly through the year despite the overall reported softness in billings.”
                                  • Home remodeling spending is expected to weaken in 2024 but may hit bottom near the end of the year, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to decrease by 1.2% to $464 billion in the first quarter of 2024 compared to Q1 2023. In the second quarter of 2024, remodeling spending will drop to $454 billion, down 6.3% from Q2 2023. Spending will then decline to $452 billion in Q3 2024, down 7.8% from Q3 2023. However, in the fourth quarter of 2024, year-over-year spending is forecast to drop 6.5% to $450 billion. The Joint Center expects that by the end of the year, improvements in homebuilding activity and lower interest rates may help slow the steady decline in remodeling spending.
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