U.S. demand for paints and coatings is forecast to approach $23 billion in 2012, according to The Freedonia Group's new report titled, "Paints & Coatings forecasts for 2012 & 2017." Volume gains are projected to accelerate from the sluggishness of the 2002-2007 period, when an economic slowdown, combined with high raw material costs and increasingly stringent environmental regulations took a toll on the U.S. paints and coatings industry. Going forward, however, growth will be aided by an improving outlook for both construction and manufacturing activity. Architectural paints represent the largest segment of the overall paints and coatings market, accounting for approximately half of demand in both volume and value terms. The market share held by traditional solvent-based coatings will continue to erode as these products are replaced by water-based, high solids, powders and other non-solvent coatings.