The British Coatings Federation’s (BCF) business confidence survey for spring 2021, conducted in April and May this year, asked printing ink and paint manufacturers about their forecasts for 2021 compared with their results for 2020.
The BCF said the survey highlighted an expectation of poor results for printing inks during the rest of 2021, and that this view was mainly due to the continued subdued demand for printed media.
BCF chief executive Tom Bowtell told Printweek: “The print media business is improving but will not return to former levels due to the switch to digital outputs, which grew during the pandemic. As we start to see a return to at least a partial return to office work for millions of commuters, we will see improvements in newspaper and magazine sales.
“On packaging inks, the overall position is much healthier although some segments have continued to struggle, such as on-the-go catering for commuters, and although this will definitely improve, again we don’t expect a return to pre-pandemic levels anytime soon.
“Conversely e-commerce continues to grow but this tends not to be point-of-sale style packaging and so ink consumption is lower. In addition, we are seeing reduced pack sizes, less packaging and alternative ways of supplying products to customers – such as bring your own container and refill in store which some supermarkets have been trialling – all of which reduce packaging ink volumes,” he added.
“UK printing ink sales volumes fell 15% in Q1 this year and by 18% over the last 12 months as a whole. In BCF’s recent confidence survey, 60% of printing ink companies now expect sales to decline in 2021, compared to just 20% when surveyed in October 2020, demonstrating that market conditions are much more challenging than we were hoping last autumn.”
As well as printing inks, the coatings industry also includes decorative paints, industrial coatings, and wallcoverings, and growth in these areas has seen business confidence in the overall industry continue to improve as the economy recovers.
The BCF business confidence index figure is now 70.4, compared to 63.5 when the survey was conducted in autumn last year, and 61.6 in the last survey conducted prior to the coronavirus pandemic, in autumn 2019.
This contrasts with June 2020, when business confidence was at rock bottom during the first lockdown, with a BCF index of only 37.1.
The improved confidence of the overall coatings industry was driven by the sales results in both decorative and industrial coatings in the first five months of 2021, as a result of continued strong consumer demand for DIY products including paints and wallcoverings, and a buoyant manufacturing and construction industry recovery.
Overall, UK paints and coatings sales were 24% higher than the same period in 2020.
“Given the very strong demand for DIY paints during the pandemic, we do expect the second half of 2021 to have lower sales compared to 2020, given that 2020 sales were 30% above 2019 levels. Monthly output for May was comparable with pre-pandemic levels,” said Bowtell.
The coatings industry continues to face ongoing raw material availability challenges and price increases across all of its sectors, as well as the regulatory uncertainty and red tape caused by the post-Brexit Free Trade Agreement (FTA) and UK REACH.
The BCF said it is currently in dialogue with the UK government to try to create a more pragmatic and proportionate approach to regulating chemicals in the UK.
“Throughout 2021, printing ink and coatings manufacturers have had to deal with a significant number of issues, with numerous force majeures on different raw material categories and other shortages running in tandem with increased demand,” said Bowtell.
“Whilst the industry will absorb some of the increases, which range from 15-35% according to British Coatings Federation’s latest raw material information note, it is inevitable that some of this will be passed on to customers.”
