If you recently have tried to complete improvement projects for your commercial or retail property, you may have noticed paint is hard to find. Unfortunately, the available paint is at its highest price in years and that may not change any time soon.
At the Painting Contractors Association Expo in Orlando in early March we had an opportunity to interview representatives of major paint manufacturers and distributors to learn their perspectives about recent material shortages and price increases. For candor we promised them we wouldn’t identify them by company, their opinions are woven together throughout this article. Here is why paint prices are rising and what you can do if they keep rising.
Factors Affecting Paint Prices
Ultimately the answer came down to simple supply and demand. We currently have limited supply due to a variety of factors which are detailed below, while demand increased due to Covid, with people cooped up in their homes, filling their time with home improvement projects.
Initial constraints on supply came with the Texas freeze in February 2021 due to the power crisis which took many manufacturing plants offline, causing major damage from freezing pipes. This affected many raw material suppliers for paint manufacturers, among other manufacturers that rely on resins. Weeks later an alkyd resin manufacturing plant explosion occurred in Ohio further reducing raw material supplies.
Raw material suppliers invoked force majeure clauses of contracts, and paint manufacturers could not receive sufficient raw materials needed to make their products. Allocations were made for raw materials based on purchase history. The one and only metal paint can manufacturer in the United States increased their price by 30%.
Labor costs increased which impacted all phases of production and shipping. Surging oil prices and high gas prices have increased transportation costs. Plus cargo ship delays in California.
Will Paint Prices Continue to Rise?
As the weather improves over the spring and summer months, paint prices are expected to continue to rise. The demand is expected to increase as more consumers prepare for home improvement projects during the warmer weather. If you are looking to renovate soon, it may be best to make your purchases now. You may want to consider employing a professional painting service to help you get the best deal possible and perform the work for your commercial or retail property.
Some manufacturers are predicting another price increase in June, followed by price stabilization. Others are predicting 1, 2, 3, or even 4 more price increases before the year’s end. Paint price increases in the double digits have been the norm, not the exception, and multiple price increases in a matter of months are not uncommon. One manufacturer had a 17% price increase in November followed by another 17% price increase in March (a cumulative increase of 36.89% – in four months).
With all these price increases, we expected to see extraordinary profits on the part of publicly traded paint companies; instead, the results were mixed. Our largest publicly traded paint manufacturer from which we received the most paint price increases in 2021 increased sales by $1.58B in 2021, but profits were down by $166M year over year. Another large publicly traded paint manufacturer increased profits by 36% on a sales increase of 21%.
How We Addressed Market Volatility
Due to the extreme price volatility and the fact that some manufacturers’ products for a particular application may be three times more expensive than another manufacturer, we have revamped our bid forms to take into account first and foremost what we believe are the best products for the job, and secondarily the best price.
If a client has a Specification for a job it will be strictly adhered to; however, if we are specifying products we will select the best products at the best price to make sure our clients are getting the best value. This may mean that paints may be supplied from multiple distributors.
Please note that when available, we do maintain allied systems, for example, a metal paint and metal primer will be from the same manufacturer. We believe this is the best approach for navigating these unprecedented times.
Professional Minnesota Interior and Exterior Painting Services
Paint prices may be on the rise, but that may not mean you cannot make the necessary repairs for your property. Stone Valley Painting provides professional interior and exterior painting services for commercial, multi-family, industrial, and retail properties in Minnesota. When you request a free estimate, our professionals will hold paint prices quoted for your next project until you are ready for work to begin. With our vast experience, you can rely on our professionals to provide unsurpassed quality at fair prices. Call or request an estimate online to receive your quote today.