The Paint Pricing Surge: Is There an End in Sight?


Share post:

These demand spikes would be challenging enough to deal with in the context of COVID, but harsh winter weather in Texas is what truly threw paint production into disarray. When frigid temperatures and ice storms knocked out Texas’s power grid, the state’s producers of resins and petrochemicals were forced offline. Given that Texas handles 42% of America’s total crude oil production—and that the resins and petrochemicals used in paint are a byproduct of oil refinement—this created a logjam that lasted well into 2022, leaving paint headquartered both in and outside of the US with few alternatives.

“Paint manufacturing has a relatively long supply chain, and some of our finishes can have over one hundred individual ingredients, which does of course create risk when the unexpected occurs,” says Gareth Hayfield, head of research and technical development at Farrow & Ball, which was acquired by Hempel in September 2021. “This event had a significant impact on the supply to the global market, timed to a spike in consumer demand as customers continued to invest in their homes.”

How are paint manufacturers faring now?

Though the overall Producer Price Index for paint and coatings jumped 22 percent from 304 in January 2021 to 372 in January 2022, the extent of those raw material shortages weren’t felt uniformly from one product category—or one brand—to the next. For Backdrop, keeping up production of its Cabinet & Door paints proved most challenging, given the necessary inputs. For Dunn-Edwards, which focuses more on the professional side of the paint market, the absence of a lift from at-home consumers meant that its challenges were more pronounced throughout 2021.


Summer Sale: Become an AD PRO member today and save $100 on an annual membership.


“Raw material allocation provided to manufacturers was based on previous year’s sales, which were at record highs for many companies catering to the DIY consumer, but not for Dunn-Edwards,” says Clay Fenstermaker, the brand’s vice president of manufacturing. “As a result, we suffered more stringent supply restraints [than] many competitors.”

While Farrow & Ball’s Hayfield notes the availability of resins has found paint production gradually returning to its “pre-pandemic rhythm,” broader macroeconomic challenges have halted any chance of economic relief. High prices for crude oil and natural gas needed to manufacture resins, likely exacerbated by geopolitical fallout from the war in Ukraine, are another reason why he doesn’t see raw material costs coming down in the near future.

The state of paint for 2023

Given that the Producer Price Index remains near record highs through May 2023, Hayfield’s conclusion is understandable. But it’s not shared universally by those with an eye on the future. Mottershead at Little Greene, for example, believes that more recent decreases in energy and crude oil prices can eventually be passed onto consumers. But perhaps PPG Paints’ Annie Wang puts it best: Expect the unexpected.

“Trade professionals should anticipate potential fluctuations in paint prices due to slowly easing inflation and market forces,” predicts Wang, the brand’s director of pricing strategy and analysis for architectural coatings in the US and Canada. “Collaborating with suppliers and distributors to understand any pricing changes or promotions can help trade professionals manage costs effectively.”

While the brands that spoke to AD PRO may not have reached a consensus on which way paint pricing will trend for the rest of 2023, they generally agreed that the disruptions of the decade so far have taught them valuable lessons in preparedness. Mottershead says Little Greene has learned to increase its stock of essential raw materials while strengthening its bonds with key—and reliable—suppliers.

In addition to citing the value of a “transparent and supportive communication network,” Hayfield says Farrow & Ball saw value in the “new opportunity to work with economies of scale with suppliers for certain ingredients” that the Hempel acquisition allowed.

Backdrop’s Ebel echoed the value of “having multiple sources of supply for key inputs, being nimble, and nurturing relationships with partners” in challenging times. But despite learning those lessons, he—and likely many others in the industry—would prefer to not have to put them to immediate use.

“Hopefully we won’t see anything like the once-in-a-generation challenge of the past few years for the paint industry again for a while,” he says.

Source link

Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

Recent posts

Related articles

Angelina Jolie Enlists Her Kids to Help Bring New Manhattan Atelier to Life

The mother of six told Vogue that she considers a venture of this magnitude to be a...

67 Best Gifts for Women (and Everyone Else in Your Life) That'll Make Their Day

Don’t get caught up in the line of thinking that there are specific gifts for women you...

Domino Sugar Factory: A Masterclass in Futuristic Adaptive Reuse

The history of Brooklyn’s Domino Sugar Factory is as old as modern New York. In the 1880s,...

Sage Green: 18 Ideas for Decorating With the Soothing Hue

It’s been compared to olives, avocados, and even the color of crisp dollar bills (see Money Moves...

Inside One of the World’s Largest and Most Advanced Underground Cities

Beneath the streets throughout parts of Turkey, a network of tunnels once housed thousands of residents seeking...

A Studio City Kitchen Was Transformed to Feel Like a Colorful Treehouse

And while the wavy ceiling in the living room remained, the original fireplace had to go. “As...

Sathorn Unique Tower: This Abandoned Skyscraper's Eerie Story Includes an Assassination Plot and More

A drone shows what the top of the tower looks like while highlighting the trash, graffiti, and...

32 Best Area Rugs for Living Rooms and Lofts (2023)

The best area rugs for living rooms, playrooms, and similarly large spaces in the home can bring a transformative...