Trade “Flat Out” with work despite Perfect Storm of Paint Shortages and Demand
The paint industry, dealers and decorators have been gripped by a perfect storm of rising demand that coincides with a material shortage exacerbated by a mix of Brexit, bureaucracy, pandemic and even climate change.
And chances are things won’t improve dramatically until the third quarter of this year.
“During the main lockdown, all of our members reported that things were going quite well, although whites, magnolias and emulsions were a bit of a problem and there were some real shortages in the northeast, south coast and the London area,” said Neil Ogilvie. CEO of the Painting and Decorating Association.
He added: “The biggest area that affects us now has been since Brexit occurred.”
The consequence of these and other causes, including raw material price increases including an overall 58% increase in oil prices since last November, has been scarcity on an unprecedented scale.
The pandemic had caused manufacturers to turn to home improvement at a time when homeowners who had to stay at home were turning to home improvement. There was now an element of catching up as the barriers were eased in various locations and demand had skyrocketed.
The procurement of special chemical ingredients from abroad for paint production was also difficult in some cases. “Some of these products are actually disappearing from the market,” said Ogilvie.
The only contributing factor was the great frost in the United States this winter, which caused major power outages across the state of Texas in mid-February and shut down large petrochemical plants producing a number of polymers used around the world. It took more than a month for the plants to run full again.
Other problems were much closer to home. After Brexit, the UK had to introduce new chemicals legislation, which Ogilvie said “duplicates a bureaucratic system” to replace the bureaucracy that everyone had become accustomed to during our EU membership. The majority of PDA members used paints made in the UK, but the import of the ingredients used to make these paints has slowed along with everything else imported through UK ports. This was a major concern for everyone in the coatings industry.
The costs for container transport from Asia to Europe also rose sharply.
This combination of problems has inevitably led to an increase in prices. Travis Perkins has put the paint price increase at around 5%. Neil Ogilvie agreed to have this communicated to the PDA.
“We understand that this is likely to continue into at least the second quarter and even into the third quarter for commodities,” said Ogilvie.
A longer term concern has been the risk that raw material shortages and price increases could affect UK paint production as more finished products come from Europe.
The current cost increases have put the painter and decorator in a certain dilemma. “The decorator has to think: ‘Do I pass these increased costs on to the customer, do I increase my hourly rate?’” Ogilvie said. “You could try to work around that by telling the customer, ‘Go and buy the paint and I’ll provide the labor.'”
Currently, the feedback from PDA members was that everyone was working flat out to meet customer demand, with many booked through October.
In response to the ongoing problem of UK regulations and bureaucracy which are compounding the problems in the industry, the PDA continues to work closely with the British Coatings Federation, which is approaching the government on such matters.
Various building dealers confirmed the difficulties outlined by the PDA.
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