HomeFeaturesFocus on the global coatings market: Global coatings market outlook

Focus on the global coatings market: Global coatings market outlook

12 November 2024

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Douglas Bohn from Orr & Boss Consulting Incorporated, provides an overview of the global coatings market.

This year, the global paint and coatings market remained stable, with no significant growth globally but no significant decline either. Higher interest rates and reduced paint purchases across many regions led to lower than anticipated growth at the start of the year. However, as interest rates begin to decline, we are seeing initial positive movement in the paint and coatings markets and expect to see stronger growth in 2025 compared to 2024.

Global Paint & Coatings Market Overview

Overall, we estimate the global paint and coatings market to be valued at $196 billion US Dollars. China represents the largest share at 25%, while India and the rest of Asia together account for 21% of the market.

By segment, decorative coatings represent the largest share, accounting for 47% of the market value. This segment is the largest across all geographic regions.

Global volume growth is estimated to be less than 1% and value growth is close to 0%.

In 2025, we expect the markets to grow faster as interest rate reductions begin to take hold and the post-Covid inflationary pressure subsides. Overall, we expect growth in the 2-3% range.

A summary of our expectations for each major region is provided below.

China:

China is the largest single paint and coatings market in the world, accounting for 25% of the global market, with an estimated value of $49 billion USD. A key issue impacting China’s economy is that its post-Covid growth rate is lower than expected. The real estate and property markets continue to struggle, leading to declines in the decorative coatings sector, as well as impacts on the wood and coil markets. In most other sectors, growth is flat, with the exception of the automotive OEM market, where sales and production are showing positive growth. Additionally, the protective and marine coatings markets are experiencing growth in China.

Recently, China’s government has announced several stimulus measures, but it is still too early to assess their impact. At this point, we expect the decorative paint market in China to remain flat next year, while the non-decorative industrial markets are likely to experience modest growth of 1-2%.

India:

We estimate the paint and coatings market in India to be valued at $11 billion USD. This year, we expect growth of 5% in volume terms and 4% in value terms. India’s economy is the fastest growing among the major global economies, which has contributed to the country’s paint and coatings market being one of the fastest growing in the world. While growth remains strong, it is not as robust as previously forecasted. The cumulative effect of inflation over the past several years has led to a downgrading of paint purchases in India. Contractors and consumers who once bought premium paints are now opting for mid-tier paints, those who used to buy mid-tier paints are switching to economy options and some consumers who previously purchased economy paints have dropped out of the market entirely.

Despite this, the market in India continues to grow and is expected to maintain high growth rates. Per capita paint and coatings consumption in India remains very low compared to other regions, at 4.5 liters per person per year, compared to the global average of 5.9 liters per person per year. This indicates that there is still significant potential for growth in India’s paint and coatings market.

Asia Excluding China and India

The paint and coatings market in the rest of Asia, excluding China and India, is estimated to be valued at $28.4 billion USD. Japan is the largest market in this region, valued at $9 billion USD, followed by South Korea at $4 billion USD. Both of these markets are mature, resulting in slower growth rates.

Another major market in Asia is Southeast Asia. This region includes Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Singapore and other countries. Like India, this region is experiencing high economic growth which is helping the paint & coatings market. However like India, downgrading of paint purchases continues to be a problem in this market and has held the market back this year. We expect this issue to gradually ease and the paint markets to start growing slightly faster in the coming years.

Central Asia, the smallest sub-region in Asia, has a paint and coatings market valued at $1.7 billion USD. While it is small, the region presents growth opportunities. We estimate the Central Asia paint and coatings market is growing at a rate of 4% per year.

Europe

The European market has been the hardest hit in recent years. Since 2021, the European paint and coatings market has declined by 12% in volume terms, with significant declines in both 2022 and 2023. This year, the decline is estimated at 2%. While most paint and coatings markets are no longer declining, they are not yet experiencing growth. We expect growth to return in 2025, with volume growth of around 1%. However, we do not anticipate a V-shaped recovery. Instead, it will be a gradual recovery as the market works to regain the volume lost in previous years.

North America:

The North American market has been flat this year. The residential sector is down, with both existing home sales and housing starts showing declines. However, the U.S. Federal Reserve has begun reducing interest rates, which is starting to drive a return to growth in the housing market. While it’s still early, mortgage applications for home purchases are trending upward, typically the first signal of growth returning. We expect the market to show some growth in 2025.

The manufacturing sector has been either flat or down. Overall manufacturing activity in North America remains steady, but automotive and some other markets, such as ACE, are experiencing declines. However, other sectors remain stable. Given the interest rate reductions, we anticipate a rebound in the paint and coatings market next year, with a current forecast of 2% volume growth.

Middle East and Africa:

The paint and coatings market in the Middle East and Africa is estimated to be worth $11.7 billion. The Middle East portion of the market is experiencing especially strong growth, driven by infrastructure development. Saudi Arabia and the UAE are seeing particularly robust growth, with Iraq also showing high growth rates in its paint and coatings market.

In contrast, the paint and coatings market in Africa has been sluggish in recent years due to a slowdown in building and construction, downgrading of paint purchases, and reduced consumer spending. However, we believe this trend is beginning to reverse and we are starting to see signs of growth in Africa. Overall, we expect this growth trend to continue.

Latin America:

The two largest paint and coatings markets in Latin America are Brazil and Mexico, which together account for 60% of the region’s market. Argentina and Colombia are the next largest markets, with a combined 13% share. In 2024, Brazil and Mexico showed modest growth, ranging from 1% to 2.5%. Argentina’s market, however, is declining due to structural reforms introduced by the new president, which are negatively impacting the market. Similarly, the paint and coatings market in Colombia is also soft. Looking ahead to next year, we expect most Latin American markets to grow in the range of 2% to 4%.

Conclusion:

Over the long term, the global paint and coatings market tends to grow at a rate similar to GDP. However, in any given period, market growth can exceed or fall short of this rate. In 2020 and 2021, the paint and coatings market grew at a rate above the global GDP. From 2022 through 2024, the market has grown at a pace below GDP levels. In 2025, we expect the global paint and coatings market to return to GDP growth levels. We anticipate that markets in South Asia, Southeast Asia, Central Asia and the Middle East will experience the fastest growth. Additionally, the more mature markets in North America and Europe are expected to return to growth in 2025 as recent interest rate reductions begin to impact the economy. Overall, we forecast growth in the 2-3% range.

Orr & Boss Consulting Incorporated is a global consulting firm that covers the Coatings, Adhesives & Sealants, and Raw Material supplier industries.

www.orrandboss.com