Single-Family Construction Boom to Support the American Paint and Coating Market

The U.S. paint and coating market was seriously hurt by the pandemic, with the drop in demand observed for all types of paints. From the second half of 2020, growing suburban construction promotes a revival of the industry. China currently features as a key export market. However, India's government-driven residential construction plan could make the country an attractive destination for American exporters.

Suburban Construction Supports the U.S. Paint and Coatings Market While the Industrial Sector Languishes

According to a new report published by IndexBox, the U.S. paint and coatings market is estimated at approx. $22.2B. As a result of the pandemic and subsequent plunge in downstream industries' output, the market declined by 18% compared to the previous year. A drop in demand was recorded for the major consuming industries: automotive, renovation and construction, oil and gas, and shipbuilding. 

Architectural coatings account for about 60% of the total production. The demand for this product reduced by 15% due to a decrease in construction in the first half of 2020. The industrial OEM coatings segment holds a 28% share of the paints and coatings market. During the pandemic, the consumption of industrial coatings decreased by 9.5%.

The current surge of U.S. housing construction is expected to become the main driver of the architectural coatings market. After the pandemic started, the demand for new housing increased significantly under low mortgage rates. More people seek places to isolate themselves, while rising unemployment forces people to relocate to suburbs with affordable housing prices. 

Should the pandemic wane in 2021, another incentive for pain and coating consumption is expected to come from the planned renewal of the U.S. airliner fleet and the space industry's growth. Although the U.S. aerospace industry has been significantly affected by the COVID-19 lockdowns, the defense sector is expected to remain stable and to feature a slow growth in 2021-2027.

With New Residential Construction Plan, India the May Emerge as Attractive Export Destination

In 2019, U.S. overseas shipments of paints and coatings amounted to $2.9B (IndexBox estimates). Canada ($1.2B), Mexico ($707M), and China ($125M) appeared to be the largest export markets for American suppliers, together comprising 69% of total exports.

Over the medium term, the Asia-Pacific is expected to feature the largest increase in construction activity, especially in China and India. Their governments are planning to invest additional funds in housing construction. In particular, India launched the "Housing for All by 2022" program, with investments of about $1.3 trillion. Although India doesn't currently feature as a top export destination for paints and coatings from the U.S., the planned surge in construction appears to be a powerful growth driver.

The average paint and coating export price stood at $3,188 per tonne in 2019. Prices varied noticeably by the country of destination; the country with the highest price was China ($4,864 per tonne), while the average price for exports to Mexico ($2,035 per tonne) was amongst the lowest. From 2013 to 2019, the most notable growth rate in terms of prices was recorded for supplies to China, while the prices for the other major destinations experienced mixed trend patterns. 

Source: IndexBox Platform