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 65,200 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
Jun 3, 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.
- US manufacturing activity contracted in May for the second consecutive month and for the 18th time in the last 19 months, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in May dropped to 48.7% from a reading of 49.2% in April. A reading above 50% indicates manufacturing expansion. May’s New Orders Index decreased by 3.7 percentage points to 45.4%. The May Production Index fell 1.1 percentage points to 50.2%. Two key customer industries for paint, coating, and adhesive manufacturers – primary metals and fabricated metal products – were among the seven manufacturing industries tracked by the ISM that reported growth in May. Chemical products – which include paint, coating, and adhesive manufacturers – also expanded in May. Important paint, coating, and adhesive customer industries that reported contractions in May included wood products, plastics & rubber products, machinery, furniture and related products, and transportation equipment.
- A recent downturn in Home Depot’s sales could signal that a decade-long surge in home improvement spending is softening, according to The Wall Street Journal. In May, Home Depot reported first-quarter revenue of $37.26 billion, down 4.2% from the same period a year earlier. The home improvement giant also revised its full-year guidance downward to a sales decline between 2% and 5% from a February estimate of flat 2024 growth. Some industry observers suggest homeowners may have completed many of their home projects during the pandemic. Consumers may also be pulling back on their spending amid growing economic uncertainty and high interest rates and inflation. Home improvement centers are a major customer group for paint, coating, and adhesive manufacturers.
- The total value of nonresidential building construction starts increased 17% in April from March, according to Dodge Construction Network. The April gain was led by a doubling of manufacturing projects over March levels. April’s institutional starts rose 16% amid an increase in healthcare and transportation starts. Commercial construction starts dropped by 1% due to weakness in the parking and warehouse markets. Year-to-date, nonresidential building starts were up 5% compared to the first four months of 2023. Dodge Construction Network chief economist Richard Branch said, “The rebound in starts in April was certainly good news for the sector. While the uncertain timing of Fed interest rate cuts is causing concern, developers and owners are feeling reasonably confident that end-market demand will sustain project starts in some sectors. While risk remains in the sector for interest rates, labor, and material prices the value of projects in planning has been reasonably stable indicating future confidence.”
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