For the third quarter 2006, the total coatings industry continued to show growth. For the quarter, shipment volume increased 3.0% while shipment value increased 1.9%. For the year-to-date, shipment volume increased 4.6% and shipment value increased 5.6%. These results continue to show the positive trends of the prior two quarters. During the third quarter, the Product OEM segment was the star performer, while the Architectural Coatings segment slowed down.

Architectural Coatings shipments for the quarter declined in volume slightly by 0.1%, but the value increased by 4.2%. For the year-to-date, shipment volume is still up 3.9% and shipment value is up 7.2%. The stronger results for the first two quarters are still maintaining the segment in a positive range through three quarters, although the growth is slowing down. This corresponds with the decline in housing starts and housing resales. Housing starts and housing resales remain a good leading indicator of the Architectural segment.

The Product OEM Coatings segment showed strong results for both the quarter and year-to-date. For the third quarter, shipment volume increased 9.9% while value increased only 0.5%. For the nine months, the segment had shipment volume increases of 9.5% and shipment value increases of 4.8%. Product OEM Coatings continue to remain strong. Manufacturing activity in the United States remains relatively strong as auto sales increased after the price of gasoline declined from the earlier part of the year.

Special Purpose Coatings for the third quarter increased 1.4% in volume shipped while declining 1.3% in shipment value. The trend this year is mixed so far. For the year-to-date, shipment volume is still negative from last year with a decline of 3.7%, while shipment value remains positive at 2.7%. The quarterly data always seems less accurate and is usually changed when the annual data is published. The data reporting for this segment is still not considered accurate on a quarterly basis.

Coatings exports remain at 8.5%, which is about average for the year. Imports declined from the previous quarter and even the previous year and amounts to about 2.2% of the total shipment value. Imports have been increasing significantly in the previous five quarters but declined by 30% from the 2005 quarter.