The GCC decorative paints market
is predicted to proliferate during the forecast period.
Enhancing a surface's aesthetic
attractiveness is the goal of decorative paints. They are frequently used both
indoors and outside, for things including furniture, walls, ceilings, and other
decorative components. Decorative paints are a flexible tool that both
homeowners and interior designers can use to give their spaces a distinctive
look and feel since they are offered in a broad variety of colours, textures,
and finishes.
Growing Building and
Construction Industry
The demand for new residential
and commercial properties has surged in UAE due to the country's fast
urbanisation and expanding middle class. The rise in construction activities is
fuelling the market for decorative paints due to more paint and coatings are
needed for both indoor and outdoor applications. The aesthetic importance of
consumers' homes and workplaces is becoming increasingly apparent. The use of
different colours and finishes for interior and exterior walls is growing in
popularity, increasing the need for decorative paints. This tendency has been
aided by rising consumer disposable incomes, shifting lifestyles, and exposure
to fashion trends.
For instance,
- The UAE government intends to invest over
USD 23 billion in infrastructure projects across the country, while the
Ministry of Energy & Infrastructure has announced to invest USD 3.4
billion in development projects by 2023.
- The demand for decorative paint is
expected to rise in the upcoming years because of upcoming
megaprojects in the United Arab Emirates, including the Abu Dhabi Midfield
Terminal, Etihad Rail passenger train, Burj Binghatti, Abu Dhabi Midfield
Terminal, SeaWorld Abu Dhabi, Dubai Wasl Tower, and Baccarat Hotel and
Residences Dubai, among others.
- On 11th December 2022, the
Kingdom of Saudi Arabia (KSA) invested worth USD 1 trillion in real estate
and infrastructure. The KSA intends to develop at least eight new cities
and predominantly along the coast of the Red Sea, with over 1.3 million
new homes by the end of 2030.
- Upcoming mega projects in Saudi Arabia:
- Neom – USD 500 billion- a
high-tech city that serves as Saudi Arabia's Vision 2030's flagship
project. It is being constructed in a location that is more than 35
times the size of Singapore, covering a total area of 26,500 square
kilometres, and it has more than 450 km of coastline. The building
town is expected to include parks and athletic amenities.
- Jabal Omar – USD 4.4
billion - This significant Makkah development, which spans 40
hectares and costs USD 4.4 billion, is one of the greatest building
projects in the kingdom. The project, which comprises a mixture of
towering hotels and residences, can accommodate up to 36,000 visitors
yearly and more than 100,000 during the Hajj season.
Therefore, the market of
decorative paints is expected to grow in UAE during 2024-2028F.
Drivers and Trends: Booming
Tourism and Hospitality Sector
The government provided a
significant portion of the funding for Dubai's infrastructure building, which
sparked a boom in the tourism and hospitality industries. These expenditures
have been done with the twin goals of luring tourists and preparing the nation
for the international event Dubai Expo 2020, which was completed in March 2022,
anticipating foreign investments in the country. The "Dubai Tourism
Strategy 2025" and the "Dubai 2040 Urban Master Plan" are two
such policies that seek to expand the number of visitors that visit Dubai and
enhance the nation's tourism and hospitality infrastructure by 134%, therefore
bolstering the UAE's tourism and hospitality sector in the GCC region.
Additionally, the World Travel and Tourism Council forecasts that the UAE's
travel and tourism industry would produce 72 billion USD in revenues and
contribute 12.7% to GDP by 2027. Thus, it is anticipated that the growth of the
GCC decorative paints market is expected to boost in the upcoming years
2024-2028F.
Urbanization and Nuclearization
of Families
The increase in urbanisation and
the nuclearization of families have increased demand for new homes, offices,
retail locations, hotels, and other types of infrastructure. These locations
require painting and coating for safety, aesthetics, and maintenance. In
addition, because of urbanisation, people's lifestyles and ambitions are
changing, and they are looking for more aesthetically pleasant and visually
appealing living and work places. To enhance the image of major cities, there
is a growing need for decorative paints that offer a range of colours,
textures, and finishes. For instance, the current population of UAE is
9,516,871, which is a 0.8% increase as compared to 2022. In 2022, the
population of UAE was 9,441,129, which has a 0.81% increase from 2021, in 2021,
the population of UAE was 9,365,145, a 0.84% increase from 2020. Additionally,
the population of Saudi Arabia in 2023 is 36,947,025, which is a 1.48% rise
from 2022 as well as the population of Saudi Arabia in 2022 was 36,408,820, a
1.28% increase from 2021. As a result, the decorative paint industry
is expected to expand as urbanization increases the demand for housing.
Moreover, the demand for decorative paints is also increasing in the GCC region
during 2024-2028F.
Challenges: Intensive Dependence
on Raw Material
Raw materials are essential for
producing decorative paint products. The operations and profitability of the
decorative paints market are significantly impacted by the cost, quality, and
availability of raw materials, which are necessary components used in the
manufacturing of paints and coatings. The availability of raw ingredients
including pigments, resins, solvents, and additives determines the quantity of
paint and coating that can be produced. Any interruption or shortage in
the supply of raw materials can have a direct impact on the decorative paints
market's capacity to meet consumer demand and finish orders on time. Raw
materials play a key part in the decorative paints market due to their critical
role in the manufacturing process, effect on product quality and performance,
cost consequences, regulatory compliance, and innovation.
Impact of COVID-19
The primary industries such as
construction, automotive, and oil refinery are the major contributors to the
economic growth of such nations. Gulf countries are important producers of
crude oil and natural gas. Lockdowns and other social restrictions, such as
social restrictions and quarantining, were enacted by the governments of
Gulf nations to stop the spread of virus. According to a report, these
restrictions had a negative effect on how these industries operated because
there was a labour shortage in manufacturing facilities, the decline in global
oil demand resulted in a reduction in oil supplies to major exporters, and
construction activities was stopped. For instance, the output of the
construction sector for 2020 declined by 10.4% in UAE country.