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
Recent Developments
Sep 28, 2023 - Shipments, Inventories Flat
- At mid-year 2023, US shipments of paint, coatings, and adhesives were flat on a year-over-year basis; inventories were up slightly over the same period. Demand for paint, coatings, and adhesives may be weakening amid flat growth in durable goods shipments. As of mid-Q3, paint, coating, and adhesive producer prices were up slightly year-over-year, but price growth was well below the overall pace of inflation. Producer price growth in 2023 has been flat.
- A strike by the United Auto Workers (UAW) union against the Big Three automakers – Ford, General Motors, and Stellantis – could reduce demand for automotive paints, coatings, and adhesives if it significantly affects auto production. About 12,700 UAW workers implemented targeted work stoppages in mid-September at three plants – one factory for each of the three car companies - according to The Wall Street Journal. In addition to calling for higher wages for auto workers, the union is negotiating for job security assurances as the industry pivots to electric vehicles (EVs), which require fewer components and less labor to assemble. The UAW is also pushing for cost-of-living adjustments, unionizing EV assembly and battery plants, and for the industry to reduce its use of temporary workers.
- The Associated Builders and Contractors (ABC) Construction Backlog Indicator dropped 0.1 months to 9.2 months in August compared to July. However, backlogs were up 0.5 months compared to August 2022’s 8.7 months. On a month-over-month basis, a 0.3-month drop in the commercial and institutional backlog was somewhat offset by a two-month rise for the infrastructure backlog and a 2.5-month gain for the heavy industrial backlog. The ABC’s Construction Confidence Index for sales rose to 58.1 in August from 57.9 in July. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, “There’s no sign of a construction recession in the near term. If anything, contractors are more upbeat, as policy and technology shifts along with economic transformation, are creating substantial demand for improvements and growth in America’s built environment.”
- Home builder confidence declined in September as high interest rates and materials and labor shortages undermine buyer purchasing power, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell five points to 45 in September 2022, which followed a six-point drop in August. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI’s September decline was the first drop in five months. The NAHB said mortgage rates above 7% are hurting housing affordability. Supply-side challenges - including shortages of workers, materials, and available lots – are also contributing to higher home prices.
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