Global demand to grow 3.5% annually through 2007
Global paints and coatings demand is forecast to rise 3.5 percent yearly
through 2007 to 28.8 million metric tons. Current dollar production gains over
the same period are projected at 5.0 percent per year to over US$83 billion,
with average prices rising due to better prospects for higher quality,
environmentally friendlier products such as powderbased and radiation-cured
coatings.
Volume gains in paints and coatings demand globally will see a
marked improvement over the 1997-2002 period due to a healthy and sustained
expansion in GDP and fixed investment levels. Rapid growth in the world' s urban
population levels will continue to put a strain on the existing housing stock,
prompting spending at both the public and private levels.
China, Asia/Pacific fastest growing
The most rapid gains will arise in the world' s emerging markets, most
prominently the Asia/Pacific region (excluding Japan), although Latin America
and Eastern Europe are also forecast to experience growth significantly above
the global average. Gains in Asia are based primarily on continued expansion in
the Chinese market, already the largest in Asia after overtaking Japan in the
early part of the new century. India, South Korea and Taiwan also hold good
prospects, particularly in construction-related markets. Although Japan is
projected to post gains that will significantly lag the global average through
2007, the country' s paint market will reverse the steady declines of the last
decade based on a better outlook for fixed investment and consumer spending.
Growth
in paints and coatings demand in North America and Western Europe will continue
to lag the global average, though these two regions will still account for half
the global market in 2007. Healthy demand from Mexico' s emerging paint market
will offset to a certain extent slower gains in the US and Canada. Slow growth
in the West European market will still mark an improvement over the performance
of the 1997-2002 period.
Environmental concerns spur change in product mix
The most important trend in the global paints and coatings industry over the
past decade has been an environmentally-driven shift in production from high
volatile organic compound (VOC) emitting solventbased paints to waterbased
paints (especially in the architectural paints sector where water-based paints
now account for the majority of the market). In Western Europe and North
America, this shift has slowed, and producers are instead switching focus in
finding new applications for powder-based and radiation- curable paints. In the
developing countries, the transition from solventbased to water-based paints is
a more recent phenomenon that should intensify through 2007.
The world market
for paints and coatings was valued at over US$65 billion in 2002. The industry
encompasses over 10,000 firms, although most are small, batchoriented producers.
The industry is dominated by large, globally oriented firms for which coatings
are a core product line. In 2002, eleven firms claimed US$1.5 billion or more in
paint revenues annually, together accounting for about half the global market.
Study coverage
World Paints & Coatings is a new Freedonia study. It provides historical
data through 2002 plus production and demand forecasts to 2007 and 2012 for 6
regions and 23 countries worldwide. This study also evaluates market shares and
profiles 36 global competitors.
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