Wood Coating Market

Market Overview

The global wood coating market size was valued at USD 10.61 billion in 2022. It is estimated to reach USD 16.22 billion by 2031, growing at a CAGR of 4.83% during the forecast period (2023–2031). The market for wood coatings will be propelled by rapid urbanization and the subsequent rise in construction activities and renovation sectors.

The wood coating is also known as the topcoat. It is applied over a wooden surface for protection from manmade and environmental factors such as water, sun, grease, dust, moisture, termites, and chemicals. These coatings also make the surface darker and increase the life span of wood, thus strengthening the aesthetics. Wood coatings can be applied to any wood, such as frameworks, garden furniture, street furniture, modern furniture, musical instruments, kitchens, doors, furnishing accessories, and flooring. It is used with a brush or spray machine in residential and non-residential applications.

Market Dynamics

Market Drivers

Growing Middle-Class Population

The overall wood coating market is growing due to the growing middle-class population base, especially in emerging economies, contributing to a growing demand for seats, beds, tables, shelves, and sofas. The growth of the coating market is closely connected to the growing middle-class population. China, India, and Brazil have large middle-class population pools driving their economies. It is estimated that the global middle class rose from 1.8 billion in 2009 to nearly 3.5 billion in 2017, and it is expected to grow to 5.3 billion by 2030.

Asia-Pacific is responsible for this growth, with China and India representing 43.3% of the global middle class by 2030. By 2030, the middle class in China will outnumber all but one globally, and its members will spend about USD 10 trillion on goods and services, moving the country into second place. On the other hand, by 2030, India is projected to be the world's largest middle-class consumer market, surpassing China and the US. Brazil, Mexico, Indonesia, Pakistan, Egypt, Nigeria, and Vietnam are expected to cross over 100 million people. As a result, the growing middle-class population will support furniture growth, which will drive the wood coating market.

Rapid Urbanization

One of the major factors boosting the wood coating market over the next five years is rapid urbanization, which contributes to the urban population. Wooden goods fill every nook and cranny of a home, making them an unacknowledged necessity. Many parts of a house, including beds, chairs, floors, tables, cabinets, and flooring, are made of wood and must be painted with wood coatings. As a result, this is one of the main factors driving the market for wood coatings because it creates very high demand from residential and non-residential buildings.

As per the UN, 55% of the global population lives in urban areas, which is expected to rise to 68% by 2050. By 2050, it is predicted that the population of the globe will have increased by 2.50 billion people due to the steady transition from rural to urban regions, with about 90% of this increase occurring in Asia and Africa. Moreover, Asia contributes a maximum of 54% to the global urban population, followed by Europe and Africa with 13% each. Rapid urbanization with increased construction activities and renovation sectors will drive the market for wood coatings.

Market Restraint

High Cost of Raw Materials

The raw materials used for wood coatings can be grouped into four broad categories – resins, pigments, solvents, and additives. Resins are polymers that get dissolved or carried through water or inorganic solvents. Pigments include primary and secondary pigments such as chromatic, extender, flattening, and fillers. Solvents are organic. Additives include rheology modifiers, biocides, surfactants, coalescent, defoamers, dispersants, and adhesion promotors. Pigments, resins, and fillers account for more than 75% of the raw materials used in the coatings market.

One of the major challenges that the wood coating market faces is the cost of raw materials, which increased because of the rupee depreciation and movement of crude oil prices. The key raw materials coatings manufacturers use are titanium oxide (Tio2), which turned 18%-30% costlier. In the UK, the price of Tio2 increased by up to 15%, and in Europe, the same rose by up to 22%. Suppliers of Tio2 are feeling the impact of the hike. Besides Tio2, crude oil derivatives such as monomer and phthalic anhydride are wood coating manufacturers' other raw materials. However, their prices have also surged due to the hike in crude oil prices, which impedes market growth.

Market Opportunities

Rising DIY Homeowners

Do it Yourself (DIY) is a major trend, strengthening the demand for wood coatings. DIY projects enable enthusiasts to engage in the modification, maintenance, upgrades, and rebuilding of material possessions such as houses and gardens. Over the last few years, engagement in DIY projects has heightened, particularly among the GEN Z. Economical repair and other small projects that improve house interiors are major factors helping DIY gain traction. Despite the growing interest in concrete and composite, wood is still preferred for exterior architectural uses, including siding, decking, and fencing. Moreover, the main factor contributing to the use of wood coatings is their ability to preserve wooden surfaces from stains, UV rays, rain, and other environmental factors.

Furthermore, the rising middle-class population increased the availability of paints, and the high cost of professional laborers is increasing the popularity of DIY. Decorative wood coatings in DIY processes are popular in developed countries such as the US, the UK, and Germany. For instance, in a survey, around 47% of the respondents in the US agreed that they prefer to do an exterior stain project themselves (rather than have a professional do it). However, the trend is rapidly expanding to developing countries. With rising disposable incomes, the younger population is more attracted to home improvements, house decorations, and other DIY projects.

Regional Analysis

Asia-Pacific Dominates the Global Market

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

Asia-Pacific is the most significant global wood coating market shareholder and is expected to exhibit a CAGR of 4.95% during the forecast period. Asia-Pacific is one of the fastest-growing markets for the global construction industry. This is primarily due to rapid urbanization, rising disposable income, living standards, 100% FDI, and substantial investments by the government to accommodate the growing population in India, China, Japan, Brazil, and Thailand, as the central government of India has planned to invest in the construction segment to encourage the development of this sector. The Smart City Project, with plans to build 100 major cities across India, is increasing the construction of more malls, parks, flats, offices, schools, and hotels. Likewise, Indonesia has a population of 261 million, and an urbanization rate of approximately 57% is raising the demand for houses in the country. The government of Indonesia has launched a program to build one million houses (OMH) annually in an effort to alleviate housing shortages. This has been making substantial contributions to the residential sector in this country.

Moreover, construction projects in the country supported by the Chinese government also support the demand for wood coatings. Under the Two Session 2022 scheme, the government will increase the supply of subsidized rental homes and shared ownership housing. The Chinese government will make more land available for developers to increase the housing stock in the world's largest property market. Therefore, these schemes are expected to boost the demand for housing buildings, increasing the demand for wooden items such as doors, windows, siding, cabinets, and other furniture requiring wood coatings.

North America is estimated to exhibit a CAGR of 4.61% over the forecast period. North America is the fastest-growing market for wood coating. Due to the development of residential and non-residential structures, including hotels, offices, hospitals, shopping malls, and rehabilitation activities, the market for wood coating in North America is anticipated to significantly expand during the forecast period. Moreover, the new aesthetics of wooden furniture and its availability at lower prices and long life have again gained preference for flooring, cupboards, kitchen cabinetry, decorating, and other purposes. The demand for engineered wooden furniture is rising in North America because of the increasing demand for smart homes.

The Middle East and Africa region is expected to witness tremendous growth in the construction industry due to the growing population, high economic growth, rising living standards, and increasing foreign investments. An estimated USD 1 trillion worth of construction and infrastructure projects are planned and are being tendered for execution until 2025 in the Middle East. The region has undertaken infrastructure projects valued at USD 200 billion and construction projects valued at USD 300 billion during the past few decades. Most of these projects are concentrated in Saudi Arabia, Iraq, the UAE, and Qatar.

Qatar's economy is expected to grow robust due to construction operations, especially for the 2022 FIFA World Cup. This will comprise stadium construction, hotel projects, training camps, and transport hubs built to accommodate visitors and players from other nations, with an investment of more than USD 10 billion. Moreover, the Qatar National Vision 2030 also focuses on increasing infrastructure spending in the country. These infrastructural expansion projects will drive the market for wood coatings.

Segmental Analysis

The global wood coatings market is bifurcated by formulation, coating type, and end-use.

Based on formulation, the global wood coatings market is bifurcated into solvent-borne, high-solid, water-borne, UV-cured, and powder-borne.

The water-borne segment dominates the global market and is projected to exhibit a CAGR of 5.80% over the forecast period. The market for water-borne wood coating products is growing due to urbanization in emerging economies across Asia-Pacific and Latin America. Population expansion has accelerated the rise in residential, commercial, and industrial infrastructure, thus positively impacting the demand for wooden products. Moreover, there is a growing need for water-based wood coatings in industrial wood applications.

Market participants in the kitchen cabinet industry favor these coatings because of their exceptional durability, mechanical characteristics, and minimal emission of solvents. Water-borne UV coatings have excellent block resistance immediately after cure, which allows coater parts to be stacked, packaged, and shipped right through the production time with no dwell time for hardness development.

Based on coating type, the global market is divided into stain and varnishes, wood preservatives, shellac, water repellents, and others.

The stain and varnishes segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 5.16% over the forecast period. It is the largest coating type, primarily because it renders the most important function of adding color to the timber and improves the natural characteristics of the timber grain and texture. Therefore, it offers a glossy aesthetic to wooden surfaces, making furniture attractive.

Based on end-users, the global wood coating market is divided into furniture and cabinetry, paneling and doors, siding, flooring, and others.

The furniture and cabinetry segment owns the highest market share and is expected to exhibit a CAGR of 5.61% over the forecast period. Wood coatings are extensively applied on wooden furniture as they offer higher durability, aesthetics, and protection from termites, dust, stains, and scratches. The demand for mattresses, chairs, tables, sofas, and cupboards has significantly increased due to house remodeling, new home construction, and the increased spending power of individuals. Therefore, furniture production is expected to spiral with the demand for wood coatings.

Recent Developments

• June 2023- AkzoNobel launched the powder coatings industry's first openly available online energy savings calculator. For the first time, all powder coatings customers can instantly calculate the energy and carbon reduction they could achieve with the company's Interpon products and related services.
• May 2023- AkzoNobel launched bisphenol-free beverage interior coating; thus, the era of interior coating is over. The new coating has been developed for difficult foods and beverages, such as those that are extremely acidic or need high-temperature sterilizing procedures, like milk, yogurt drinks, coffee, soft drinks, and beer.