Barring a complete global economic implosion, the next several years are looking up for those companies involved in the paint and powder coating business.
A number of independent forecasts from a variety of reputable sources are drawing the same conclusions: growing worldwide demand among key end-use sectors is driving production, manufacturing, and sales of the components that go into both liquid paint and powder coating products.
One of the more aggressive projections comes from Cleveland, Ohio-based Freedonia Group,1 a leading international business research company that publishes more than 100 industry research studies annually. According to Freedonia’s math, global paint and coatings demand will rise 5.4 percent yearly to 45.6 million metric tons (or $141B) by 2015. That represents an increase of nearly 30% over 2010. Looking farther, down the road, Freedonia expects worldwide demand to exceed 56 million metric tons (upwards of $184B) by 2020.
It should come as no surprise that the Asia/Pacific region—the largest market—is projected to grow at the quickest pace among industrialized countries, Freedonia Group’s research shows. Looking at the U.S.—another critical end-use market for paints and powder coatings—forecasts are equally encouraging. According to SBI Reports, which has been providing leading industrial market research reporting for more than a decade, steady growth is expected over the course of the next 10 years. It’s most recent market report, “Paints and Coatings, U.S. Market—2nd Edition,”2 shows water-based paints and coatings will not only experience robust growth but also lead the market (nearly $6B in water-based paints and coatings alone by 2021). And we’re not just talking about the typical industrial, automotive, marine, and military applications. According to the report, growth in the construction and remodeling industries will yield increases in the market for paints and coatings as well. “Architecture produced roughly 736.4 million gallons of paints in 2011,” noted Shelley Carr, publisher of SBI.
These statistical trends are corroborated by IHS Chemical.3 The research firm predicts that overall demand from 2011 to 2016 will increase at average annual rates of 1–2% in the United States and 1.5–2.5% in Western Europe. In Japan, however, IHS expects consumption of paints and coatings will climb at a relatively slow pace during this period (0.3%) as a result of some softness in several major end-use markets, including machinery and appliances. In the more vibrant economies of the world, however, coatings are growing at a much faster rate. The best prospects for growth are in China (8–10% growth per year in the near future), Eastern Europe (6%) and Latin America (6%). Growth of coatings in India and Indonesia are pegged at 5–10%.
Other predictions: Multinational producers—i.e., PPG, Akzo Nobel, Nippon, BASF, et. al—should gain even more presence in the developing world as living standards increase and per capita consumption of coatings rises, the report shows.
More importantly, market analysts expect to see prosperity beyond commodity categories. In fact, IHS anticipates increased production of relatively “higher-valued” coatings. Among them: CARC coatings, high-performance organic finishes for specialty applications, and further developments on the nanotechnology front with respect to paints.
Another key indicator of future growth is increased demand for “greener” coatings. SBI’s Carr notes: “environmentally-friendly paints are the driving trend in consumer attitudes and regulations, which has paved the way to an increased market for economically feasible water-based paints.” This is spurred by use in architectural applications and the automotive industry, which is looking for more efficient paints and coatings that require fewer solvents and coats, as well as less energy in application. “The shift towards water-based paints is an easy plus for companies looking to move towards green initiatives,” Carr explained. “There are a handful of new technologies that reflect sunlight to keep buildings cooler, contain less solvents and are asthma/allergy friendly.” IHS identified other emerging technologies, i.e., those derived from thermosetting emulsion and colloidal dispersion.
Virtually all the major research firms and analysts agree that air quality regulations will continue to be a driving force behind the adoption of new coating technologies, with the prospects looking particularly rosy for waterborne and high-solids coatings, powders, UV curables and two-component systems.
Happy coating!
--Reginald Tucker
REFERENCES
- More than 90% of the industrial companies in the Fortune 500 use Freedonia research to help with their strategic planning.
- SBI Reports’ “Paints and Coatings, U.S. Market-2nd Edition” contains comprehensive historical data (2007–2011) and forecast data (2012– 2021) for the paints and coatings market, including the industry's sub-segments divided by application and type.
- IHS provides technical information, tools and operational and advisory services to help clients make critical business decisions, maximize their core business processes and improve productivity.
