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

                                  Apr 2, 2024 - Steady but Slow Industry Growth
                                  • The paint, coating, and adhesive manufacturing industry is expected to experience slow but steady sales growth in the coming years. The industry’s year-over-year sales rose 4.2% in 2023 after increasing 8.1% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to slow to 1.5% in 2024, then see sluggish but steady average annual growth of about 2.3% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                  • Demand for automotive paints and coatings may see continued improvement, but challenges remain. In March 2024, US light vehicle sales were estimated to be about 1.47 million, up about 17.8% compared to the prior month and 6.9% higher than in March 2023, according to S&P Global Mobility. Full-year 2024 US light vehicle sales are expected to reach 15.96 million units, up 3% over 2023. S&P Global Mobility’s principal analyst Chris Hopson said, "With inventory growing, incentives rising, and quarter-end sales targets to be met, March sales volume will be relatively positive, rising to over 1.4 million units for just the second time in the past 34 months. However, since the second quarter of 2023, the pace of sales has been in a prolonged holding period, given the current purchase environment facing auto consumers. High-interest rates, slowly receding vehicle prices, and uncertain economic conditions continue to push against any consistent upshift for demand levels."
                                  • New single-family home sales fell 0.3% month-over-month but were up 5.9% year-over-year in February 2024, according to the US Department of Commerce. While a rise in interest rates in February slowed new home sales, the overall market is gaining ground amid tight inventories of existing homes for sale, according to Reuters. Lower home prices may also lure buyers; the median new home sales price in February was $400,500, down 3.5% from January 2024. February’s median home price was also the lowest in two and a half years. To attract buyers, builders are reducing home sizes to make them more affordable while offering discounts and other incentives.
                                  • The total value of nonresidential building construction starts decreased a seasonally adjusted 16% in February from January, according to Dodge Construction Network. The drop was led by a 28% decrease in manufacturing projects. Commercial construction starts were off by 3% in February amid fewer warehouse starts, and institutional projects saw a 19% decline in starts amid weakness in the transportation and education buildings segments. Residential construction starts fell 2% in February as single-family saw a 5% gain but multifamily was down by 12%. Dodge Construction Network chief economist Richard Branch said, “Construction activity was hit hard by higher rates and more restrictive credit standards. Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays – especially in the manufacturing sector. While optimism should prevail in the second half of the year as the Federal Reserve begins to cut rates, some sectors like commercial, will make little headway over the remainder of the year.”
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