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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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 47 workers and generates $31 million annually.

    • The paint, coating, and adhesive manufacturing industry consists of about 1,300 companies that employ about 64,200 workers and generate about $42 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

                                  Coronavirus Update

                                  Nov 20, 2021 - Orders Go Unfilled
                                  • Supply chain disruptions prevented paint manufacturer PPG from "completely fulfilling our strong order books" and impacted $350 million in sales, according to CEO Michael McGarry. The company expects supply to normalize in early 2022 as it adds more raw material suppliers and expects fewer force majeure declarations from existing partners.
                                  • Some firms may be negatively impacted by the pandemic-related semiconductor chip shortage that has forced auto production cuts. IHS Markit estimates that global light vehicle production has lost 7.4 million units through the third quarter of 2021, with Ford and GM experiencing the most significant production disruptions as a result of the chip shortage.
                                  • Automaker General Motors expects a production cut of about 200,000 vehicles in North America during the second half of 2021. That's double the 100,000 units that was expected when GM reported second-quarter earnings in August. Company officials cite the ongoing semiconductor shortage as the primary cause of production cuts.
                                  • Researchers at Northwestern University have created a substance which, when used as a coating, may wick floating virus droplets out of the air. The substance comes in a paint-like form that can be spread or sprayed across a surface. Anything from barriers and face shields through walls and tables to even clothes and curtains may be candidates for application. The researchers' experiments showed that plexiglass surfaces treated with the coating removed about 80% of the droplets that their uncoated counterparts left in the air. The results were published in the journal Chem.
                                  • Painting contractors made up 70% of paint manufacturer Benjamin Moore's customer base before the coronavirus pandemic and DIYers the remaining 30%, according to chief executive Dan Calkins. The business shifted to 56% contractors and 44% percent DIYers during the pandemic. Part of the reason was that consumers didn’t want workers in their homes, and a lot of new business came from younger customers who had never painted before. “Lots of millennials said, ‘I can do this,’ ” Calkins says. Benjamin Moore’s US business increased 17% year over year in 2020, Calkins says, while the paint industry as a whole was up 13%.
                                  • Total construction starts will increase 4% in 2021, according to Dodge Data & Analytics. "The dollar value of starts for residential buildings will increase 5% in 2021, nonresidential buildings will gain 3%, and nonbuilding construction will improve 7%. Only the residential sector, however, will exceed its 2019 level of starts thanks to historically low mortgage rates that boost single family housing,” said Richard Branch, Chief Economist for Dodge Data & Analytics.
                                  • Total construction spending decreased 0.5% in value month over month on an adjusted basis but increased 7.9% in value year over year on an unadjusted basis in September, according to the US Census Bureau. Residential construction spending decreased 0.4% month over month but increased 19.2% year over year in September. Nonresidential construction spending decreased 0.6% month over month and 1.2% year over year in September.
                                  • New orders for durable goods decreased 0.3% in value month over month on an adjusted basis in September but increased 23.4% in value year over year on an unadjusted basis during the first nine months of 2021, according to the US Census Bureau. Year-over-year comparisons may yield atypical results due to the large drop in orders during the early months of the coronavirus pandemic.
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