Exterior Architectural Coatings Market

The global exterior decorative market declined from 2005 to 2006.� In North America exterior architectural coatings demand was down from five to six percent in 2006 compared to 2005. "This is in contrast to interior coatings demand which was up approximately one percent during this period," said Scott Detiveaux, a senior consultant at Orr and Boss.

There are four key challenges facing exterior manufacturers, according to Detiveaux. "The first is rising raw material costs. While raw material prices have stabilized of late, the increases have far outpaced manufacturers ability to pass them along to customers," he said. "The second challenge is the overall slowdown in economic activity. The decline in the U.S. housing market has been well documented. The construction market has suffered a similar decline in Europe.� The third challenge is customer and channel consolidation. The final challenge is manufacturer consolidation. These latter two have a particular impact on the smaller suppliers as they struggle to compete against global giants among fewer customers.

The softness in the exterior market is continuing in 2007. "The continuing trend of declining m