Dulux Trade Comment: Q3 2021

It has been another difficult quarter, as the industry grapples with labour and materials supply issues. Job vacancies are at a record high and supply chain problems facing the UK have led to a fall in construction output for four consecutive months. This is likely to have an impact downstream on the trade paint market as these are problematic for our major customers.

Early in Q3, demand stayed strong within the trade as total market volume for August 2021 was only slightly down (-4%) compared to the same month last year. On a moving annual totals (MAT) basis though, volumes were up 14% year-on-year and we were still 4.6% to the good versus the MAT volume for August 2019 – a more normal pre-Covid period.

However, change is in the air. According to figures from the British Coatings Federation, trade paint sales in September were down 15% against September sales last year, following what they called ‘lacklustre’ performances in each of the previous three months.

The downward trend was replicated in the decorative paint market, where September was down 26% year-on-year, following a run of falls since May this year as consumer confidence faltered and the property boom from earlier in the year started to fizzle out.

Despite the gloom, year-to-date trade paint sales for 2021 are still up by more than 8% compared to last year. Is it a big ask to maintain this as we move into Q4? Maybe, maybe not. The CPA expects construction growth to stay strong for the rest of the year, so much will depend on the industry’s ability to overcome the frustrations of supply shortages, bottlenecks at ports and mounting cost pressures.

There is one area of potential growth that merchants should be aware of as we head towards the end of the year, and that is the number of generalist or multiskilled tradespeople who are now applying paint. Their numbers are growing, yet a majority aren’t buying their paint from builders’ merchants. They are buying elsewhere. Why? If you can answer that, there’s a lucrative new revenue stream waiting for merchants to pick up.

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