Daily Management Review

Already High Home Paint Prices Slated To Rise More


Already High Home Paint Prices Slated To Rise More
A shortage of supplies and higher prices are making it harder for do-it-yourselfers, consequently making it even more aggravating for the home improvement segment.
One of the major ingredients of home improvement – paints, is getting more expensive by the day. 
There is a shortage of paint and a consequent surge in price because of a bundle of factors – ranging from an unusual freeze in Texas earlier this year to an increase in demand to the current issues being faced by global supply chains.
With store owners finding it difficult to keep products on the shelves and to adjust to the increasing costs from suppliers, it is getting difficult for customers to get the paint that they like and at the price point they can afford.
One of the countries that are facing this shortage is the United States.
“We’ve had multiple price increases across the board from every manufacturer we deal with,” said Randy Moser, owner of Buss Paints, a specialty store in Emmaus, Pennsylvania, about 53 miles north of Philadelphia in the Lehigh Valley, in an interview to CNBC.  
“It’s been this way for a while now, and it seems like it’s not going to get any better over the next three to six months, either,” Moser added in the interview.
A large number of customers reportedly developed an interest in projects around the house during the Covid-19 pandemic. That has led to a surge in demand for goods for home development projects such as sprucing up the garden, building swimming pools and adding a fresh coat of paint.
That surge in demand pressured supplies and increased prices.
There has been a slowdown in production of petroleum, a critical ingredient of paint, not only in the US but throughout the world. At the same time, the delivery of other raw materials for paint has been impacted by clogged up supply chains.
Officials of Sherwin-Williams, the largest paint manufacturer in the US that generated $18.4 billion in annual revenue last year, cautioned investors about additional “pricing actions” for addressing the increase in raw material costs.
“These production disruptions, coupled with surging architectural and industrial demand, have pressured raw material supply and rapidly driven prices upward,” Julie Young, vice president of global corporate communications for Sherwin-Williams, said in a statement.
“The pace at which capacity comes back online and supply becomes more robust remains uncertain,” Young added. “We have been highly proactive in managing the supply chain disruptions to minimize the impact on our customers.”
There has been a 10.6 per cent year on year rise in producer prices for painting and coating manufacturing, which marked the sharpest spike since January 2009. In the same period, there was an 8.3 per cent annualised rise in the producer price index, which was also the highest since records were started to be kept in 2010.
Sale volume and revenues have also risen in the same period. A 7.8 per cent annualized growth in sale revenues June, to $1.34 billion, was reported for paint and wallpaper stores. However, there has been a slowdown in sales growth since it reached its peak in April.
Experts predict that the price of paints could continue to go up in the foreseeable future.
“If you want to do some work around the house, get in the car and buy paint now,” AkzoNobel CEO Thierry Vanlancker told Bloomberg News earlier this week. Pricing is set to increase significantly in the second half of 2021, said the Netherlands-based global paint manufacturer in its latest investor update.