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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 22, 2022 - Auto Production Faces Mounting Headwinds
                                  • Paint, coating, and adhesives demand from the auto industry may remain below pre-pandemic levels in 2022, according to an S&P Global Mobility forecast updated in April 2022. The ongoing semiconductor shortage, the war in Ukraine, COVID-19 lockdowns in China, and inflation’s effect on vehicle affordability are expected to slow auto demand and production. S&P Global Mobility’s April forecast expects global light vehicle production to reach about 80.6 million units, down 1.1% from its March outlook. The forecast for Europe dropped 2.9% to 16.5 million units, and greater China’s production is expected to reach 24.6 million units, down 1.6% from the March forecast. North American light vehicle production is projected to be about 14.7 million units, a downgrade of 0.1% from the March outlook.
                                  • 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. Conditions improved in the first quarter of 2022, and PPG posted record first-quarter sales of $4.3 billion, up 11% over Q2 2021. While the company said supply chain disruptions persist, they have moderated and are expected to continue to improve amid increased supplier capabilities and labor availability in the US, as well as reduced demand from Europe.
                                  • Total construction spending increased 0.5% in value month over month on an adjusted basis in February 2022, according to the US Census Bureau. Total unadjusted construction spending rose 10.4% in the first two months of 2022 compared to the same period in 2021. Residential construction spending increased 1.1% month over month in February and was up 15.5% for the first two months of 2022. Nonresidential construction spending decreased 0.1% month over month but increased 5.8% in the first two months of the year compared to the same period a year earlier.
                                  • New orders for durable goods decreased 2.1% in value month over month on an adjusted basis in February 2022 but increased 11.9% in value year over year on an unadjusted basis for all 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.
                                  • Paint, coating, and adhesive prices were being affected by supply chain issues before Russia invaded Ukraine, and resulting sanctions by the US and its allies drove oil prices to their highest level since 2013. Prices for oil-derived inputs for paints and varnishes are likely to go even higher. In March 2022, US producer prices for paint, coating, and adhesive manufacturers rose 21% compared to a year earlier and were up 24% from the pre-pandemic month of February 2020.
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