Europe Paints and Coatings Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Europe Paints and Coatings Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The European paints and coatings market was estimated at USD 32,915.63 million in 2020, and the market is projected to register a CAGR of over 3% during the forecast period (2021-2026).

The market was negatively affected by COVID-19 in 2020. Owing to the pandemic scenario, several countries in the region went into lockdown, which halted all the manufacturing and construction activities, thus creating a negative impact on the demand in the paints and coatings market. According to the International Monetary Fund (IMF), the GDP growth rate of Europe decreased from 1.6% in 2019 to -7.2% in 2020, and it is expected to increase to 4.7% by 2021. The condition is expected to recover in 2021, which is likely to restore the growth trajectory of the market studied.

• Over the short term, a rise in the use of protective coatings in the booming offshore wind turbine industry and increasing importance for retrofitting and improving the efficiency of the existing housing stock built before 1970 are expected to drive the market during the forecast period. Increasing demand for architectural coatings is one of the major factors driving the growth of the market.
• On the flip side, the unavailability of adequate substitutes for banned lead chromate used in industrial coatings, rise in the prices of raw materials, and negative impact of COVID-19 pandemic are expected to hinder the growth of the market studied.
• The use of nanotechnology in paints and coatings and the increase in the demand for bio-based and eco-friendly paints and coatings are likely to act as opportunities in the future.
• Germany dominated the market across Europe due to the increasing demand in the construction industry.

• Paints and coatings are not only used in the interior of the houses to add colors or decorative purposes but also to perform a wide range of functions. Their functions vary depending upon the type of environment and room that they are used in.
• Paints and coatings are applied on the exterior of the house, not only to give them a new look but also to protect it from blistering summers, freezing winters, soaking rain, and the daily bombardment of UV radiation without fading, peeling away, and cracking.
• Developments in the construction sector are partly due to the robust economic growth and its positive implications on corporate profits, household income, and the state of public finances. The construction activities in countries such as Germany, France, United Kingdom, etc., are expected to drive the growth of the market.
• Moreover, low-interest-rate levels, internal migration flows, immigration, and investment backlog accumulated in areas like infrastructure, as the financial crisis is supporting the upswing.
• The renewed focus of European construction companies on local markets and their core business is expected to lead to an increased demand for paints and coatings during the forecast period.
• In Europe, German construction companies are benefiting from soaring demand for real estate and increased investments in buildings. The upswing in construction has been encouraged by the European Central Bank’s ultra-low interest rates, a growing urban population, and high immigration over the past five years. The German government made an announcement regarding its plan to construct around 1.5 million housing units by 2021.
• In United Kingdom, the construction sector contributes to around 6% of the country’s GDP. To provide better infrastructure to the population across the country, the government has planned to invest 1-2% of its GDP in infrastructure between 2020 and 2050 as part of the National Productivity Investment Fund (NPIF).
• All the aforementioned factors are expected to drive the demand in the paints and coatings market in the architectural segment over the forecast period.

• The economic growth of the country is affected by the factors such as trade tensions leading to reduced exports and tariff disputes triggered by the US government. However, the country is expected to rise from such fluctuations in economic performance over the forecast period.
• Germany is one of the most affected countries due to the COVID-19 outbreak in Europe. In Q1 and Q2 2020, owing to the severe impact of COVID-19, the nation’s economy witnessed a historical downfall with 2.2% and 10.1% declines, respectively (quarter-over-quarter). In Q2 2020, the GDP fall was the largest fall since the beginning of quarterly GDP calculations by Germany in 1970. According to the IMF, the nation’s GDP is expected to witness a huge downfall to reach -6% in 2020.
• Germany leads Europe’s automotive market with 41 assembly and engine production plants that contribute to one-third of the total automobile production in Europe. The new car market in the country, overall, exceeded three million vehicles, but there was a small contraction in the new car market due to the introduction of new WLTP emission control regulations, as numerous manufacturers were unable to register new cars.
• The sales/registrations of new vehicles are increasing steadily in the country, with improvement in the economy reflecting consumer confidence. The sales in the automotive industry in the country have been good in the past few years, as the car sales have increased from 3,822,060 units in 2018 to 4,017,059 units in 2019. However, in the first half of 2020, German car sales have declined by more than 35.5%, owing to the COVID-19 pandemic. However, it is expected that the automotive sales are going to recover by the end of 2021, which would likely provide a stable contribution to the paints and coatings market from the automotive sector in the country.
• Also, Germany has the largest construction industry in Europe. The residential construction segment is expected to have moderately high growth. According to industry experts, the recent positive migration to the country is stimulating the demand for new residential construction. It is estimated that 3.6 million migrants are expected to arrive in Germany until 2020, requiring at least 350,000 new dwellings per year, which is expected to boost the construction sector.
• However, new housing demand will decrease to around 260,000 per year by 2025 and to 246,000 by 2030. Still, in 2018, the German government made an announcement regarding its plan to construct around 1.5 million housing units by 2021.
• Furthermore, due to the COVID-19 scenario, the construction industry halted in 2020, which had a negative impact on the market studied. However, the industry is expected to pick up pace in 2021, thereby driving the market studied.
• Thus, owing to the growth in the various end-user industries in the country, the consumption of paints and coatings is expected to drive the demand during the forecast period.

The European paints and coatings market is partially fragmented, with top players accounting for lesser share of the market. Akzo Nobel NV, BASF SE, PPG Industries, Inc., Hempel A/S, and Beckers Group are some of the major manufacturers of paints and coatings in the European region.

• The market estimate (ME) sheet in Excel format
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