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Colorful Outlook Improves for Finishers

PAINT CANS FINISHERSThe future looks bright for the coatings industry. There appears to be plenty of opportunity for finishers ready to make the leap.

As I write this post, a very positive November jobs report was released. Another indication we’re getting the economy back on track. More than a half million jobs were added in the past two months alone. This is more than the estimated 200,000 a month needed to keep pushing down the unemployment rate. At the very least, it bodes well for consumer confidence!

Meanwhile, experts say global demand for paint and coatings will rise 5.2 percent per year to 51.6 million metric tons in 2017, valued at $186 billion. That’s a lot of liquid to spread around but somebody’s got to do it.

Still not convinced? Here are some additional fragments I’ve pieced together as we close out 2014:

MARKET TIDBITS

  • Housing supply chain—Look for 25 percent growth in 2015, led by single-family housing starts and accelerating purchases of appliances and other durable goods. Minor caveat: New-home construction and sales are still at about 50 percent of pre-bubble levels and are not expected to recover fully until 2017.
  • Remodeling—Remodelers say they are doing 96 percent as much business as they were seven years ago. And despite the moderation seen in early 2014, the market should reach full recovery in third quarter 2015.
  • Manufacturing production—Continuing to trend and forecast to grow 3.4 percent in 2014, 4 percent in 2015, and 3.6 percent in 2016 … faster than the U.S. economy. Here, we benefit from an improved outlook for motor vehicle production (driven by low pump prices) and pent-up demand for durable goods and equipment, all of which had been postponed during the economic downturn and further delayed due to weather conditions the first part of 2014.
  • RV shipments—A key indicator of consumer confidence, the RV industry is on track to deliver a fifth consecutive annual increase since the end of the last recession. October 2014 was the RV industry’s best month in 38 years. “Jayco in Middlebury, Ind., predicts the industry will tie unit sales records in 2015 and break them in 2016, thanks to rising U.S. employment and continued low interest rates.”
  • Building construction—Across the board advances connected with a strong rebound in global spending, particularly in North America, Europe, and Japan.
  • Medical—This segment will continue a strong gradual trend as boomers drive demand for healthcare thus supplies and equipment.
  • High-tech—Production is strong and likely to grow 8.5 percent in 2015, and 10.4 percent in 2016.
  • Energy—Increased domestic production of natural gas from shale is paying off, reducing the need for energy imports and increasing exports. Meanwhile, U.S. oil production is also up, which is causing global oil prices to fall which, in turn, shrinks our nation’s energy bill at the same time.

INDUSTRY TIDBITS

  1. Higher-quality coatings—Though it might not be saying much, increased use of higher-quality coatings is expected in both the developed and developing worlds. Could we see that trend in the U.S. as well?
  2. Cheaper substrates—Some wood finishers are experiencing an interesting shift to less expensive substrates (lumber). Customers are willing to try the aforementioned “higher-quality coatings” to achieve a finished look similar to what they would get using a higher-priced, higher-quality substrate.
  3. Water-based coatings—These environmentally safe coatings will continue to gain market share at the expense of solvent-based paints and coatings in most world markets. See “Industry Opportunity: Switching From Solvent-Based to Water-Based Coatings.”
  4. Reduction of VOCs—Coatings manufacturers continue to seek to reduce the VOC content of their products to comply with ever-increasing environmental regulations.
  5. Specialty coatings—Demand is expected to increase as a result of an improved demand for cars and trucks and overall industrial output. And, to a lesser degree, watch for trends triggered by innovation and new materials development.

DON’T DO NOTHING

Some pundits say the economy is “slower than it once was but moving forward.” Wow, what a call to action. How un-motivating!

I happen to believe just the opposite. I think there are easily too many opportunities. Some of you will agree. The challenge for finishers is not so much the opportunity, but how to narrow and focus on what’s right for you.

Whatever you choose, create more of the small fuzzy goals rather than a few big hairy ones. That way, your team will sense some of the accomplishment and won’t lose precious steam in the process.

One suggestion: Start with a new coatings partner. One who is experienced enough to help you make a leap in 2015. Find out how Accessa can help you improve your outlook. Talk to them about your ideas and your objectives. Accessa Coatings Solutions can provide both onsite support and full laboratory support capabilities to keep moving forward at any speed. Just don’t do nothing!

I welcome your comments, questions or more discussion.

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