After the highly positive results in 2010, the Brazilian coatings industry foresaw a good performance in 2011, according to ABRAFATI. However, the growth rate diminished dramatically this year, as has been the case with the economy. During the ABRAFATI Forum of the Coatings Industry, held last year, the announced forecasts presented more modest numbers.

“In the first half of this year, sales of residential coatings increased by only 0.5% compared to the same period in 2010,” said Dilson Ferreira, executive president of ABRAFATI. “We should see a slight increase this second half, which will lead to a 1% increase for the year.”

After growth of more than 10% in 2010, the situation this year is different. “Due to the present uncertainties and the delicate international scenario, consumers are adopting a more conservative attitude by delaying purchases of coatings for remodels and self-building,” Ferreira said. “Similarly, retailers avoid keeping stock and replace products more slowly. However, we believe business will pick up at a stronger pace next year, when we expect a 4% increase in sales.”

Among the positive factors that will maintain the high level of sales of residential coatings-above 1 billion liters a year-is the priority the government has given to construction as an instrument to foster economic and social development. This has been evidenced by the launch of the Minha Casa Minha Vida 2 housing program and the extension of the IPI tax reduction (Industrialized Product Tax).

The overall growth of the coatings industry this year is expected to be 1.3%, reaching 1.377 billion liters. “The outlook is still positive, considering that the unique characteristics of 2010 should not be repeated anytime soon,” Ferreira said. “It is important to stress that, in addition to the great events we will have until 2022, which will ensure a sustainable growth, the structural reasons that stimulate sales will still be present for many years to come. Among these factors, the most noteworthy are: investments in housing and infrastructure, the amplification of segments related to oil exploration and distribution, the strengthening of the internal market, and the growth of the middle class.”

For more information, visitwww.abrafati.com.br.