Often viewed as a key
indicator for the overall health of the home improvement market,
the UK paint, wall coverings and woodcare sectors have experienced
a tough trading environment in the last 18 months.
The market was
estimated to be worth around £880 million in 2008, reflecting a
decline of around 5% in value terms from 2007. This was mainly due
to the difficult conditions experienced in both the domestic and
trade paint sectors caused by significant decline in the
housebuilding and house moving sectors. Current indications are
for further value decline of around 3% in 2009 with conditions
continuing to be described as “challenging’’ by many industry
sources.
Paints dominate the
product mix with around 64% value share in 2008, having lost
slight share in recent years. Lower activity in key end-use
sectors has considerably affected trade paints over the last 12-18
months with trade gloss in particular experiencing declining
demand. However, there has been an indication of some growth in
the DIY sector with some consumers switching back to DIY rather
than employing professional decorators. In addition, higher value
products such as low VOC paints and those with “eco” credentials
have helped partially offset overall market decline.
The wall coverings
sector has experienced marginal growth in 2007-08, though this has
been set against a background of overall volume decline since the
late 1990’s. Wall coverings have benefited from rising average
prices in recent years, strengthened by use of higher value wall
coverings in “feature walls”. In contrast, the woodcare sector has
experienced more volatile conditions, with garden woodcare having
been particularly hit by poor summer weather conditions in
2007-08.
The overall market has
also been affected by changes within leading suppliers over the
last 2-3 years. This has been mainly due to the ascendancy of Akzo
Nobel within the paint and woodcare sectors via its acquisition of
ICI, which has resulted in some industry restructuring.
It remains extremely
difficult to forecast the future performance of the paint, wall
coverings and woodcare market due to continuing uncertainties
within the UK and wider global economies. Overall, the market is
expected to experience further decline in 2009 before some
stability returns to the market from late 2010 onwards. Current
indications are for only moderate annual rates of growth to 2013
when the market is expected to reach around £930 million. Impetus
to the market is likely to be primarily derived from returning
confidence in the housing market – both in terms of new build and
renovation – though non-domestic markets are likely to slow
considerably particularly if cutbacks are implemented in
Government capital spending programmes from 2011.
