The March jobs report on Friday showed a resilient economy and moderate inflation. While some economists and politicians have spent months forecasting a dire recession, our clients’ confident marketing budgets -- and K&A vital channel checks -- run counter to those concerns. After all, Home Building and Construction Products provide an “early indicator.”
How so, you might ask?
Consider Bank of America survey of painting contractors. The research involved professional paint contractors from across the US. These survey participants are particularly well “qualified”… as they spend more than $5,000 annually on paint. In fact, some 7% of them spend more than 100,000 a year.
According to those surveyed, 2023 has ushered in a period of heavy bidding activity. And growing waitlists. The largest contractors -- those most likely to work in commercial end markets -- report the most significant number of customers that are “jobsite” prepared for paint services.
"One of the more striking observations was the apparent resiliency of contractor backlogs," Bank of America analyst Steve Byrne wrote in a note released this week. "Despite a weak construction outlook, 36% of survey respondents have a larger backlog now than they did at this time in 2019, and 20% have a 10+% larger backlog."
With an average of 12 weeks of backlog work, paint contractors will continue to be in high demand, according to PPG’s Q3 earnings report.
“This consistency indicates that overall demand for professional painting services remains high. As a result of the strong housing market experienced for the majority of 2022, homes in the US have never been more valuable,” says Courtney Deemer, general manager, US stores and The Home Depot organization, for PPG’s architectural coatings business in the US and Canada.
“Whether homeowners are looking to increase the value of their home before taking advantage of the ‘sellers’ market,’ or if they’re looking to remodel their current homes because buying a new one is too expensive, pro painters, remodelers and other skilled tradesmen are in high demand to assist with ‘do it for me’ projects.”
What Exterior Paint Color Has to Do with This
Here’s another “qualitative” metric we’re considering in a post-pandemic economy: Behr Paint's recent naming of an exterior paint color of the year. Historically, when brands name a color of the year it involves interior aesthetics. Elevating an exterior color could very well be a confident signal now… and expected upward trajectory for Outdoor Living Building Product Brands in the near term. By the way, if you’re curious, the color, called "Cordovan Brown," is a rich, warm brown classic tone that could complement any elevation.
How These Two Things Connect
We see the painting contractor backlog and Behr’s exterior color of the year as two highly relevant, and increasingly positive signs. They demonstrate a confidence in the future and a willingness to invest in Outdoor Living brands. This is good news for the paint industry as well as for collated nails, siding, windows, fasteners, cable railing and fence/decking construction.
What can B2B building product brands learn from the consumer market?
B2B and B2C brands run on parallel tracks and B2B building product brands can learn a lot from the consumer market. The consumer market is usually an indicator of future trends -- so by paying attention to it -- B2B brands can get a sense of what the future may hold.
And all of that together looks to us like a recipe for sustained demand.
Behr’s exterior color of the year represents something similar. Behr’s exhibiting a confidence in the market for exterior finishes. And it wouldn’t be happening if that market was contracting. There’s a school of thought that holds that recessions and expansions are rooted in psychology. Namely, that economies expand when people are optimistic about the future.
This piece originally ran on Kleber & Associates Home and Building Blog.