Decorative Coating Market

Market Overview

The global decorative coating market size was valued at USD 63.78 billion in 2022. It is estimated to reach USD 98.77 billion by 2031, growing at a CAGR of 4.98% during the forecast period (2023–2031).

Decorative coatings, also called architectural coatings, are applied on the surfaces of buildings and other structures for protection and decoration. Decorative coatings are done on the interiors and exteriors of new and existing buildings. It has anti-slip, anti-graffiti, anti-microbial, urine-repellent, scratch-resistant, and fire-resistant properties. The primary objective of decorative coatings is to enhance the aesthetics of a surface while also making it more visually appealing and colorful.

Decorative coatings not only add aesthetic value but also protect against the elements, UV rays, corrosion, blistering, chalking, fading, and flaking, as well as provide temperature resistance and seal off the surface from dirt and dust. In addition to providing vibrant colors to metal and plastic substrates and aiding in light absorption and insulation, decorative coatings are utilized worldwide in the commercial, industrial, and residential sectors.

Market Dynamics

Global Decorative Coating Market Drivers

Construction and Rapid Urbanization

Urbanization plays an important role in the demand for decorative coatings. As per a UN report, 55% of the globe's population lives in urban areas, which is expected to increase to 68% by 2050. The world's urban population grew rapidly from 2.80 billion in 2000 to 4.37 billion in 2020. Rapid urbanization with increased construction activities and renovation sectors will drive the market for decorative coatings.

Furthermore, ornamental coatings find application in the interior and exterior surfaces of various types of buildings, including residential, commercial, institutional, and industrial structures. The increasing construction activities in Asia are expected to significantly contribute to the surge in demand for decorative coatings. Hence, brand-new houses and remodeling of existing homes will drive the decorative coating market demand.

High Demand from the Manufacturing Sector in Developing Countries

Emerging economies in the Asia-Pacific region with rapid economic growth, markets with significant potential for consumption, and economies with rising industrial and manufacturing competitiveness have begun to pressure their developed counterparts in the global manufacturing sector. These economies are advancing significantly in all manufacturing areas, with low- and medium-technology-enabled industries producing up to 65% of the total production.

Traditionally dominated by countries like the US, Germany, Italy, Switzerland, and France, hi-tech manufacturing has shifted to economies such as China, Singapore, and India. Top manufacturing centers in Asia, such as India and China, can now invest in major infrastructure development. One of the major drivers is investments into these economies driven by their high consumption and manufacturing potential. This offers high opportunities for decorative coatings in the region.

Global Decorative Coating Market Restraint

High Cost of Raw Materials

One of the major challenges the decorative coatings market faces is the cost of raw materials, which increased because of the rupee depreciation and the movement of crude oil prices. The key raw material used by coatings manufacturers is titanium oxide (Tio2), which turned 18-30% costlier; in the UK, the price of titanium oxide increased by up to 15%, and in Europe, the same rose by up to 22%.

Suppliers are seeing the impact of the increase in titanium oxide. Other than titanium oxide, raw materials used by ornamental manufacturing enterprises include monomer and phthalic anhydride derived from crude oil. However, their prices have also surged due to the hike in crude oil prices. As a result, it is predicted that market expansion will be constrained over the projection period by the high cost of raw materials.

Global Decorative Coating Market Opportunities

Introduction of New Technologies

Decorative coating manufacturers are important in preserving the environment by launching premium products. These kinds of initiatives will help vendors to achieve sustainable growth in the future. Henceforth, the awareness of eco-friendly paints and government regulations are leading to the development of innovative materials and formulations and the advancement of equipment and application processes, thereby driving the demand for decorative coatings.

The increased desire for aesthetically pleasing and environmentally sustainable coatings has also led to advancements in durability. Current demographic, socioeconomic, and regulatory factors also necessitate a longer product lifetime. In addition, increasing reference to high performance has played an important role, especially in commercial and institutional applications. Leading coating producers in Asia-Pacific are developing smart coatings that will increase mold and dirt resistance and environmentally friendly water-borne coatings with low VOC concentrations and no formaldehyde. Therefore, introducing new technologies by key manufacturers is antiquated to create opportunities for market growth.

Regional Analysis

Based on region, the global decorative coating market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global decorative coating market shareholder and is estimated to exhibit a CAGR of 5.26% during the forecast period. The decorative coatings market in the Asia-Pacific region is thriving due to rising construction in the residential and non-residential segments, foreign investment, and government investments in infrastructure and industrial sectors in China and India. The requirement for high-quality infrastructure in developing economies like India and China has been driving the decorative coating market growth. In emerging nations like India and China, the rapidly rising populations supplement the residential construction sector, directly boosting the market for decorative coatings in Asia-Pacific. In addition, rapid urbanization has maximized the growth of the construction, industrial, and commercial sectors. Renovation and repainting of houses during the festival season in India are also responsible for a flourishing decorative coatings market in the region.

Europe is predicted to exhibit a CAGR of 4.99% over the forecast period. The residential and non-residential sectors have been driving the market in Europe. Compared to 2018, the construction industry in the EUROCONSTRUCT region grew by 2.90% in 2019. Renovation projects saw a steady 2% growth, while new construction climbed by 3.90% in the area. One of the most significant trends in recent years has been environmentally friendly decorative coatings, driven by strict EU rules relating to VOC emissions. Hence, solvent-borne coatings are being replaced by water-borne coating in the European region. The European Commission and federal government agencies have set the new rules for the eco-product certification scheme, delivered and managed by Green Council. These rules and regulations will ensure a green and sustainable environment with minimal or zero VOC emissions. In Europe, the demand for eco-friendly coatings has been increasing in residential, non-residential, and construction sectors because of the growth in awareness of the benefits of these coatings.

North America, which includes the key countries of the US and Canada, constitutes a significant region as it hosts the world's most advanced and largest economies. The US is the major revenue contributor to the North American decorative coatings market. However, Canada is likely to experience healthy growth during the forecast period. The rising income has empowered populations to focus on their home decoration activities. The past several years have experienced continued growth in the DIY category, which is projected to continue for several years. In addition, the growth in the DIY decorative coating industry is attributed to home décor improvement projects for personalized interior design. The prevalence of apartment living has been increasing and is favored by the millennial demographic seeking employment prospects. Gardens tend to be tiny or nonexistent in apartment buildings. Consequently, the process of urbanization is anticipated to stimulate a heightened demand for compact gardening practices, including indoor plants and smart gardening kits. This increased interest in compact gardening is predicted to positively impact the region's decorative coatings market.

Latin America's considerable contribution to the decorative coatings market is due to the revenue generated from its two large economies, Brazil and Mexico. However, countries such as Argentina, Colombia, Peru, and Chile may serve as hotspots for the market over the forecast period due to growth in the construction sector. The COVID-19 outbreak severely impacted the construction industry in the region. Major projects were halted due to lockdowns imposed in the territory. The construction industry in Latin America is expected to restart in key countries by 2021, with growth anticipated in hotels, housing, and other segments.

In addition, the COVID-19 pandemic affected the short-term and long-term decline in foreign investments. In 2019, FDI inflow in the region was USD 164.70 billion. However, in 2020, FDI investments in the region declined by 40%-55% due to the impact of COVID-19. It also impacted major industries such as manufacturing and construction. These factors affected the demand for decorative coatings in the Latin American region.

Segmental Analysis

The global decorative coating market is bifurcated into resin type, surface type, technology type, product, user type, and end-user.

Based on resin type, the global market is divided into acrylic, alkyd, vinyl, polyurethane, and others. 

The acrylic-based resins segment is the most significant contributor to the market share and is anticipated to exhibit a CAGR of 5.67% over the forecast period. Acrylic resins are primarily based on acrylate and methacrylate monomers, providing good weather resistance, color, gloss retention, excellent durability, and impressive resistance against water and UV rays. They are also easy to apply, stable under extremely cold temperatures, and cost-effective compared to other materials. Acrylic resins are the fastest-growing resin type in the decorative coating industry due to their huge scope for various applications.

Based on surface type, the global market is segmented into interior and exterior decorative coating. 

The interior decorative coating segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 5.17% over the forecast period. Interior coatings are used to improve the aesthetics and functionality of houses. Interior decoratives include managing the interior space of a building while considering several construction aspects, such as finishes, plumbing, lighting, materials, electrical requirements, and smart use of the available space. In addition, interior decorative coatings are often used for covering blemishes in walls and ceilings. Interior decorative coatings have a minimal environmental impact and a low odor, offering many other advantages. The increasing usage of interior decorative coating products demands that they boast biocidal properties to eliminate harmful chemicals in the air.

Based on technology type, the global market is bifurcated into solvent-borne, water-borne, powder-based, and others. 

The water-borne segment owns the highest decorative coating market share and is predicted to exhibit a CAGR of 5.40% over the forecast period. Water-borne coatings are surface coatings that utilize water as a solvent to disperse the resins added to create coatings, thus making them eco-friendly. Water-borne coatings meet the US and European regulations governing VOC emissions, producing a VOC content of less than 3.50 pounds per gallon. Further, water-borne coatings have low toxicity, and the high water content makes them less flammable, reducing or eliminating hazardous water disposal.

Based on the product, the global market is bifurcated into emulsions, enamels, primers, and others. 

The emulsion segment dominates the global market and is projected to exhibit a CAGR of 5.97% over the forecast period. Emulsion-based paint contains emulsion polymers, which are sustainable products and help reduce VOC emissions. Hence, the demand for emulsion-based paint has been driven by an increasing substitution of solvent-based systems for water-based, more environment-friendly systems. This paint is widely used for walls and ceilings due to its excellent durability and hard finishes. In addition, emulsion paints consist of pigments, resin, solvents, and additives. These paints are water-based and are far better than oil-based emulsion paints.

Based on user type, the global market is divided into DIY and professional users. 

The professional users segment accounts for the largest market share and is anticipated to exhibit a CAGR of 5.36% over the forecast period. Professional users refer to people who specialize in painting newly constructed buildings and repainting existing ones. The demand for professional users has been rising due to increasing per capita income, growing living standards, and many young populations showing disinterest in home improvements. Therefore, the market is moving toward premium decorative coatings from DIY to contractor applied. Nowadays, the demand for professional users in the decorative coatings industry is rising due to the construction of new commercial buildings, such as hotels and schools, where aesthetic appeal is important.

Based on end-users, the global market is bifurcated into residential and non-residential sectors. 

The residential segment is the highest contributor to the market and is anticipated to exhibit a CAGR of 5.21% over the forecast period. The rising disposable incomes, growing living standards, nuclear families, and concerns for sustainability and eco-friendliness are expected to drive the residential sector's market for the next five years. The expansion of spaces in the residential and commercial sectors results from the demographic shift in the consumer base. Over the last three decades, about one billion people have escaped extreme poverty. This has shaped the usual way of living and promoted urban living standards in developing nations. The increase in the development of buildings and public infrastructure will drive the market for decorative coatings.

Recent Developments

• April 2023- Sherwin-Williams and AkzoNobel agreed for AkzoNobel to acquire Sherwin-Williams' Chinese Decorative Paints division. The project is anticipated to be completed, pending regulatory approvals, in the second half of 2023.
• May 2023- Asian Paints Berger, a division of Asian Paints Limited, introduced its inventive decorative wall finishing product inspired by Arabesque motifs and specially curated for the region to revive its design heritage.