Three major events, Brexit, Covid-19 and the war in Ukraine, plus the cost of living crisis have been dominating headlines as annual inflation hits 9%, weakening consumer confidence and demand across the sector. But the market’s reaction was not as severe as expected.

The Trade Paint market, down -2% against the forecast for Q2, was not as steep as it could have been. Year to date volume was down -1.3% vs the same period in 2019, and -3.8% down year on year.

A -2.3% drop in disposable income and a downgrade in the forecast for 2023 against 2022 from 1.3% to 0.1% may result in a decline in the amount of disposable income available to invest in homes this year and next.

Trade could soften further as our (Applier pipeline survey data) suggests just 33% of painters-decorators are booked up five months ahead, down from a high of 49% in April. However, evidence on social media suggests decorators, perhaps, do not book past Christmas.

The outlook for 2022 into 2023 continues to soften, with the CPA (Construction Products Association) revising down total construction output for the year 2022 from -2.8% year on year to -2.5%, with the decline stronger in RMI than new work.

In terms of sectors, house completions have been revised down in their latest forecast from 2% to 1% year on year, with concern about brick costs and supplies which have heavy energy requirements. That will likely hit potential paint sales too.

Trade paint is most reliant on Housing RMI, and construction value in the sector is still expected to contract -3% this year. Public Housing RMI and housebuilding growth might offset some of this volume loss, but Industrial is expected to grow strongly this year and next.

Retail sales are continuing a longer-term trend of decline, with a revised quarter two forecast of -7% for 2022, as the cost of living hits the amount of disposable income.

Overall, the Trade Paint market is in a challenging period, and it’s forecast to see minimal growth from 2023 onwards.