Paint Materials Costs Rebound Following Recent Lows

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ACA tracks two key sets of government data showing price trends in the industry – one is the historical figure for the pricing of “prepared paint” as calculated by the Bureau of Labor Statistics (BLS), and the other is an ACA-developed figure for “paint materials,” which is also based on BLS data. BLS tracks inflation in the form of its Producer Price Index (PPI) for inputs into the production of goods used in many industries, looking at several raw materials used at different stages of the production process.

BLS PPI data typically show greater volatility the further up the value chain, with primary inputs always more volatile than intermediate inputs, which are more volatile than finished goods. The coatings industry is no different. As illustrated below, the pricing of prepared paint has shown little variance in the past decade, rising from 205 to 276 since the beginning of 2007, while paint materials have risen from just over 160 to over 226, then falling back under 165 before recovering somewhat to nearly 178 (note that both data series have different index years).

Notably, raw material costs have been quite volatile in comparison to the final product of prepared paint, rising significantly following the recession of 2007-09, then declining during the period from mid-2014 to early 2016 and then rising somewhat since then (but not to the high levels seen from 2011-14). Raw materials make up most of the cost of making paint, so these prices are closely tracked by manufacturers.

ACA calculates these figures monthly, and are available to members here (password required).

Contact ACA’s Allen Irish for more information.