ACA Economic Climate Survey Suggests Continued Growth, Along with Caution Signs

By Allen Irish

For a number of years, ACA has con­ducted a survey of senior industry executives to determine how they collectively view the current business climate for our industry and to deter­mine how they believe their firms and the industry will fare over the next year or so. The Fall 2016 survey, like its recent predecessors, found that the industry’s senior leadership holds a relatively opti­mistic view of both its current situation as well as its prospects over the next year. If the opinions of the industry’s senior business leaders are on target, the coatings industry should maintain its trajectory of continued growth in 2017.

Since the end of the Great Recession, the coatings industry has seen largely unabated growth. As shown in Figure 1, the overall volume and value of the indus­try’s output have consistently grown  at a roughly 3-4% rate over most of the period following 2010. This steady growth in both volume and value tracks the steady improve­ment in both the housing and construc­tion markets since 2010, along with a resumption in the growth of durable goods manufacturing during the recovery.

Sales of existing homes, one of the major drivers of paint demand, have consistently averaged over 5.2 million units (annualized) for over a year now (as compared with less than 5 million in 2014). Overall construction spending has risen steadily since its recent low point in early 2011 and has recovered to nearly the level it last achieved during the height of the housing boom in 2006 (Figure 2).