Architectural coatings are applied to the surfaces of buildings and structures to form a complete coating film, which can be firmly attached to the surfaces of buildings and structures and used as a material for protection, decoration and other functions.

At present, architectural coatings are the most widely used and most used coatings in China's coatings. According to statistics, its output accounts for about one-third of the total coating output. The statistics here are only water-based architectural coatings. If you include other architectural coatings, such as functional architectural coatings, the output of architectural coatings is approximately half of the total output of the coatings, which is basically the same as in developed countries.

Architectural Coatings Industry Overview The full range of architectural coatings in China has everything, including exterior coatings, interior wall coatings, waterproof coatings, and floor coatings. Based on the low barriers to entry in the architectural coatings industry and the relatively large number of production companies, although the paint industry is not highly automated and employs more people, it is still relatively fast. At present, domestic architectural coatings have been integrated into the world architectural coating system, and the market pattern of supply and demand balance has been basically maintained. Product classification has gradually and clearly focused on two types of key products, namely exterior wall coatings and interior wall coatings.

With the improvement of people’s sense of quality, the increase in national laws and regulations and enforcement, the rise in raw material prices and labor costs, and the shortage of talents, the Small Building Coatings Enterprise Award has gradually withdrawn from the market. Now the output is mainly concentrated in the annual sales income of more than 50 million yuan, and there are about 200 companies. This concentration will continue and there will be a trend of speeding up. Therefore, the industrial concentration of architectural coatings is further evident. Products also continue to transition from low-end products to high-end products, with high-end products as the core, forming a spindle-shaped structure.

Macroeconomics and Development of Upstream and Downstream Industries In the fourth quarter of 2012, GDP grew by 7.9%, which was a 0.5 percentage point increase over the third quarter. The annual GDP growth rate was 7.8%. This means that the Chinese economy has bottomed out.

The rapid development of the domestic economy is the basis for the development of the architectural coatings industry, and the real estate industry is a barometer of the architectural coatings market. In 2012, China's annual construction area was approximately 3 billion square meters. Real estate investment in 2012 was 7.18 trillion yuan, an increase of 16.3% from 2011, and the growth rate has dropped. The average annual growth rate from 2002 to 2012 was 24.9%.

In addition, under the macro-control of the central government, on the one hand, the construction of affordable housing will increase, which will be a good factor for middle and low-grade architectural coatings; on the other hand, it will impose restrictions on the purchase of commercial housing, limited loans and a 20% personal income tax, etc. It also has a certain influence on the development of architectural coatings. From January 2002 to January 2013, the growth rate of investment in real estate development in the country has been declining and surging at 15%. In January and February of 2013, the year-long slump ended. It rose to 22.8%.

Sales of architectural coatings accounted for approximately 0.9% of real estate investment. In 2012, the real estate investment was 7180.4 billion yuan. It can be calculated that the architectural paint sales revenue for the year was approximately 64.6 billion yuan. Such a large year of construction area and real estate investment is a strong driving force for the future development of architectural coatings. Therefore, the market for architectural coatings will have a blowout trend in the next five years.