Painter insight: Labour shortage in construction and its consequences; the paint industry
One of the major challenges facing the construction industry as a whole are labour shortages, both qualitative and quantitative. This will impact the market and will provide both challenges and opportunities. In this article I would like to dive a bit deeper in the consequences for the paint industry.
Painting companies perceive a shortage of skilled professional painters in several European countries. Especially Germany, Poland and the Netherlands stand out here, as almost all painting companies agree to this statement. The shortage is less impending in UK, Belgium, France, Spain and Italy, though painters in all countries indicate that the shortage is expected to grow over the coming 5 years. These outcomes are part of the Painter Insight Monitor, an annual research conducted by USP Marketing Consultancy among professional painting companies in 8 key European markets, based on 250 successful interviews per country.
In 2017, the majority of these companies already think there is a shortage of skilled professional painters in their country. Despite the shortage, painters in some countries still feel that they are experiencing more competition than before, but this highly country specific; In Poland, a majority of the painters indicates that unregistered companies / black circuit are a threat to their business, while in Germany and the Netherlands, self-employed handy men are increasingly taking on professional paint jobs.
What stands out is that shortage is expected to grow in all countries in the upcoming five years. France is the only country where a majority believes that there’s a sufficient number of craftsmen to cover the work load. In all 7 other European countries, more than 50% of the companies expects a shortage of skilled painters in the next five years. In Belgium and Spain, this is 59%; in the UK and Italy, this is 68%. Following this trend line, for Germany, this is 89%; for The Netherlands, this is 92% and for Poland, this is 93%.
The labour shortage itself is driven by the overall bad image of working in construction (especially amongst the younger generation), the outflow of the older generation and a shrinking overall labour force. On the demand side however, there is growth of the construction market and the paint segment within. Furthermore, we expect that in the DIY market, the trend towards DIFM (do-it-for-me) will continue. Again, this means more demand for labour.
Labour is already expensive in Western Europe and with a rise in demand and a shortage on the supply side, cost will rise further. At some point the already high order books of painters will start to overflow. I expect that this will mean (and in some cases this is already happening) that alternatives to the traditional professional painter will see the demand for their services rise. This diverse group, consisting of contractors, handymen, Eastern European workers, black labour and so on, will take over a part of the business.
Not much is known about these ‘multi-skillers’. Where do they buy? Which brands do they prefer? How can you target them with pull marketing? For manufacturers of paint, this group possess both a threat (I.e buying at Hornbach instead of the traditional paint merchants abd different brand/product choices) and an opportunity (gain a good position at these groups will mean an increase in overall market share). Furthermore, they will most likely not be as skilled as professional painters, so providing training might be a good way to engage them and create loyalty.
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