ACE Coatings Showing Signs of Recovery

Agricultural, Construction and Earthmoving (ACE) equipment is big business, one that generates a significant demand for coatings. Prior to the recession, the ACE equipment coatings market, was valued at €2.1 billion generating demand of over 500,000 tonnes.

The impact of the global recession was felt in all markets. The construction industry was worst affected and spending in real terms fell by almost 20% in 2009. This led to dramatic declines in both equipment orders and output. Dealers and leasing companies already held surplus stock, which placed additional pressures on the equipment manufacturers. Markets declined by as much as 60% in some markets, including Russia, leading to overall production output of machinery falling by around 40% in 2009. This resulted in considerable shrinkage in associated coatings demand.

Governments set aside considerable sums of money for infrastructure and construction projects as part of their fiscal stimulus packages, intended to inject funds into key industries during the downturn. These were more effective in countries like China and contributed to stronger performance in the Asia Pacific region, which accounts for over 55% of the ACE equipment coatings market.

The agricultural equipment coatings segment performed comparatively better, but still witnessed declines in equipment output of around 15%. As a result, the value of the global market for ACE equipment coatings (including industrial trucks) in 2009 was estimated to be around €1.6 billion.

As the order books of equipment manufacturers started to fill in 2010, coatings consumption increased by around 3%, and is expected to continue growth in 2011. However, a return to pre-recession levels is not expected until 2015.

These are the findings of the Paint Research Association (PRA) that has just released its view of ACE equipment coatings as part of its Irfab® Global Industrial Coatings Market 2010 – 2020 study. The full study, which will be completed later this year, focuses exclusively on industrial coatings and draws together a wealth of market data and industry comment collected through extensive interviews with all of the leading industry participants. The Irfab® team applies their own coatings industry experience and expertise to validate the data collected to ensure accuracy and consistency and to determine future coatings demand profiles

The ACE chapter, which is available separately, provides a full review of coatings for agriculture, construction and earthmoving equipment and the impact that the recessions has had on consumption profiles. The machinery covered also includes materials handling equipment.  The chapter considers technology trends and market developments from a regional perspective, and includes information on the key country markets in both volume and value terms. Demand drivers and market dynamics of both the agriculture and construction industries are presented. The outlook presents annual volume forecasts for the next five years, with trend indicators for 2020.

The Irfab® Global Industrial Coatings Markets 2010-2020 study is PRA’s most ambitious and comprehensive industry review to date. It is an invaluable tool to improve understanding of the end-user coatings market and to support strategic decision making.

Visit www.pra-world.com/irfab for more information and to download sample pages from the study.