Tough times at the European coatings market
The Q4 industrial production in the EU held up reasonably well and large-scale production cuts have not occurred. The market may start growing again in Q2 and Q3.
The European paint and coatings market is estimated to be EUR 39.4 billion. As in all regions of the world, decorative coatings is the largest segment at EUR 21 billion. Other significant markets include general industrial, automotive refinish, industrial wood and powder.
The largest paints and coatings markets in Europe correspond to the largest economies. Germany, the United Kingdom, France, and Italy are nearly 50 % of the European market.
Market growth rates
Volume of both decorative and non-decorative industrial coatings markets declined in 2022. Total volume was estimated to be down 6 %. Much of this decline occurred in Q4. As of this writing, we expect Q1 of 2023 to be down too before recovery begins in Q2 of 2023. For the entire year, we expect the European market to be down 2 % in volume and up 5% in value. The graphs below provide the estimates.
The European construction and industrial manufacturing indices have declined for most of 2022. Every month from February through November, construction and industrial activity declined in Europe. In December both construction and industrial activity slightly increased. Activity is still below levels in earlier 2022 and late 2021 but the small increase in activity in December is a hopeful sign that the worst of the energy crisis is behind us.
Over a longer period of time, we expect the European paint and coatings volume growth rates to converge to estimated GDP growth across Europe. For the entire market, we expect that the market will grow by 1.5 % volume and 3.4 % value CAGR through 2028.
The European paint and coatings market in the second half of 2022 and beginning of 2023 have declined. We are hopeful that the market is near the bottom. The most pessimistic forecasts are not being realised as manufacturing and production has held up reasonably well across Europe so far. We think that by the end of Q1 and start of Q2, economic growth will return to Europe and the paint and coatings markets will start to grow again.