In the thick of the pandemic, it was difficult to leave the house without hearing the low hum of power tools. Due to low interest rates and global populace yearning for a break in its boredom, DIY home improvement projects soared in popularity.
These projects boosted consumer paint demand which helped offset some losses as demand contracted due to the effects of the COVID-19 pandemic. Manufacturing and new housing construction, were two of the worst hit sectors. However, the $186 billion global market for paint and coatings is poised for a strong rebound in 2021.
As these markets bounce back, and home renovation remains elevated (if not as high as in 2020), paint and coating sales are expected to return to growth in all major world regions and remain relatively strong over the long term due to ongoing healthy expansion in a number of areas.
A new Freedonia Group study highlights trends driving growth in the global paint and coating market through 2024, when demand is forecasted to total $230 billion. Highlighted below are six key growth drivers to watch.
1. Rising personal incomes and improving housing conditions in the Asia/Pacific region
Led by China, which alone is expected to account for 53% of total new demand worldwide through 2024, the Asia/Pacific region’s continued favorable growth in construction activity, urbanization, consumer spending, and general economic activity will provide opportunities for paint and coatings suppliers.
Rising urban population levels, for example, will continue to put intense pressure on the region’s housing stock – a trend that will necessitate upgrading the existing stock and promote construction of new housing, bolstering architectural paint requirements in the residential market.
2. Rapid expansion of nonresidential construction in the Asia/Pacific region
Gains in the nonresidential building construction sector will also drive advances in the Asia/Pacific architectural paint market. Though growth in the large Chinese market will slow from the previous five-year period, more rapid gains in India will make up the difference to an extent. India’s share of demand is increasing quickly, with demand levels expected to approach those of the US by 2024.
3. Significant growth in manufacturing and construction activity in India
Paint demand growth in India is expected to be among the fastest of any major market worldwide through 2024, fueled by continued solid increases in both residential and nonresidential building construction, as well as by gains in manufacturing output above the global average. The country is also investing heavily in new infrastructure, setting the world record for fastest road construction in April.
Given the low level of current paint demand per capita in India, there exist many opportunities for market growth as the country’s economy continues to expand. Paint and coating prices in India are among the lowest in the world, providing opportunities for value growth, as rising per capita incomes will allow consumers to increasingly choose higher quality paints.
4. Increasing DIY activity in developed countries, particularly in the US
In the US and some other countries, the COVID-19 pandemic drove a surge in DIY repainting and remodeling activity, as residents – who were spending more time at their residences and working remotely as a result of social distancing and stay-at-home orders – tackled home improvement projects.
Residential remodeling and repainting applications are expected to account for 60% of all new architectural paint demand (in volume terms) worldwide through 2024. Repainting cycles vary widely by country based on a number of factors, including:
- building material, with some materials like wood requiring more frequent repainting than others
- level of wear, with more frequent repainting required in harsh climatic conditions
- consumer spending habits (increases in disposable income typically shorten repainting cycles)
5. Global increases in motor vehicle production and ownership
During the COVID-19 pandemic, paint demand in the motor vehicle segment sharply declined due to temporary facility closures – production virtually seized in some parts of the world for several months to a year – and a reduction in travel, as people spent more time at home.
Through 2024, however, demand for OEM coatings in the motor vehicle market is forecast to accelerate sharply, supported by rebounding motor vehicle production, especially in the Asia/Pacific region, as output rises dramatically over the 2014-2019 period. However, lingering supply chain issues and a chip shortage due to the pandemic-driven surge in demand for consumer electronics will restrain swifter recovery at the global level.
6. Rising infrastructure construction in developing countries
Global paint demand will be further aided by rising infrastructure spending in developing countries through projects such as China’s Belt and Road, boosting demand for coatings used on roads and bridges.
Road and bridge coatings include primarily traffic marking paint but also other coatings used to protect transportation infrastructure such as bridges and airport structures.
- Traffic marking paints are primarily used for the delineation of lanes and berms on highways, streets, and roads but are also used to mark crosswalks, stop bars and legends, parking lots, safety zones, and work areas, as well as to provide driver and pedestrian information.
- In this demanding market, coatings must be formulated to withstand the stresses of vehicle traffic and exposure to salt and other de-icing agents used in inclement weather, as well as vandalism and graffiti.
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About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.