PPG Competition
Now Viewing PPG's competition in: Paint and Coating Manufacturing (primary)
Recent Developments
US Existing Home Sales Continue Decline - Sales of existing homes, a demand driver for architectural paint and coatings sales, fell 16.6 percent in June 2008 compared to June 2007, according to the National Association of Realtors (NAR). The NAR expects provisions within the recently passed Housing and Economic Recovery Act of 2008 to help strengthen mortgage markets while helping homeowners facing foreclosure.
Construction Spending Decreases - US construction spending, an important indicator of demand for paints and coatings, declined 5.9 percent in June 2008 compared to a year earlier. Although residential construction spending dropped 26.4 percent, nonresidential construction spending increased 10.8 percent. Specific areas within the nonresidential sector that grew include manufacturing, 39.8 percent; lodging, 32.8 percent; power, 30.1 percent; and public safety, 21.7 percent.
US Auto Market Remains Weak - US auto sales, a key demand indicator for automotive paints and coatings, declined 18 percent in June 2008 compared to June 2007, according to Automotive News. Chrysler led the Big Three in sales declines with a 36 percent drop; Ford and GM sales fell 29 percent and 18 percent, respectively. US industrial production of motor vehicles decreased 12.6 percent in July 2008.
Competitive Landscape
Demand is driven by industrial production and the housing market. The profitability of individual companies depends on technological expertise and efficient production. Small companies can compete successfully with large ones because of the large number of paints and coatings used for a wide variety of applications, including decoration, water resistance, and corrosion resistance. The industry is highly automated: average annual revenue per employee is about $430,000.
Paint and Coating Manufacturing Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US paints, varnishes and related products is forecast to grow at an annual compounded rate of 5.5 percent between 2008 and 2013.
Paint Production Growth Volatile
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Tied to auto industry, housing
- Need strong technical expertise
- Risk: Auto and home sales in slump
Industries Where PPG Competes
- Chemicals
- Paints, Coatings & Other Finishing Product Manufacturing (primary)
- Basic and Intermediate Chemical & Petrochemical Manufacturing
- Industrial Manufacturing
- Glass & Clay Product Manufacturing
