13 February 2013 00:03 [Source: ICIS news]
HOUSTON (ICIS)--Growth of nearly 10% in Valspar’s wood coatings segment during its fiscal 2013 first quarter is an indicator of continued recovery within the domestic housing market, the US-based coatings firm said on Tuesday.
In 2006 and 2007, that business declined leading into the recession, CEO Gary Hendrickson said during an earnings conference call. “Now it’s coming out, and we think that is a leading indicator of what’s going on in the North American housing market," Hendrickson said. "That business is perfectly correlated to the housing market.”
Existing home sales are the driver of overall architectural paint demand, according to Hendrickson, who added that new construction is a relatively small percentage. “So, to the extent that existing home sales continue to be positive, I think the US paint market is in for a good year in 2013,” he said.
Despite a slight overall first-quarter net income decline, the company’s North American wood coatings and US consumer paint division grew in terms of volume and revenue during the period.
“The good performance of these two businesses indicates a continued recovery in the US housing market that we expect will maintain momentum as the year progresses,” Hendrickson said.
Hendrickson also mentioned eventual profits from Valspar’s acquisition of two paint plants from Ace Hardware, saying that purchase and the company’s retail programme “underscore our confidence in the US housing market. We believe that any investment we make now in the recovery of the US housing market is a good one for the long term.”
($1 = €0.75)
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