The Green Industry is finishing up a pretty good year. Even with weather and labor issues, landscapers worked hard to pull off a good season.
Can’t say every sign is rosy right now, but the industry experts say the Green Industry is into a good pattern for the next few years. In fact those experts predict the biggest headache will be finding labor to keep up with the demand.
Labor was the most often problem landscapers reported this year. The Lawn and Landscape magazine (L&L) survey has labor as #1 problem by 45%. Followed by healthcare cost increases, then low-ball competitors.
My experience talking with contractors in our region verifies the Lawn and Landscape findings. Everyone is looking for reliable people. No easy answers.
The L&L survey also found contractors are raising their prices. Demand is growing fast. Several landscapers have told me they increased their prices and none of their prospects or customers even noticed. If you are scared to raise prices take heart in what others are seeing.
An article in Irrigation & Green Industry magazine talks about rates charged for irrigation systems. The author goes into great detail comparing the amounts charged back to 1988. His contention is costs have gone way up, but the amount charged for an irrigation system is about the same. He strongly states that playing the role of victim to low-ballers is defeatist. Learn to sell instead.
Property owners are still investing. The outdoor living movement continues. This is a good time to be in the Green Industry. Hardscapers are having a hay-day, but it’s reported that landscape maintenance is the largest, fastest growing, and most profitable segment. Ageing population is driving increased demand for someone to care for the landscape.
Design-Build construction is the next big growth area, fueled by a lot of renovations. All those homes built over the past 35 years are due for a landscape fix-up. And hardscapes are the number one feature people want to add.
According to L&L, 78% of landscapers were profitable in 2014. I’d suspect that number to rise for 2015.
Another finding; about 25% of the owners are now actively looking at ways to retire. Many have plans in place and a lot of companies will be on the market over the next few years. A good article by Michael Donnellan in the Ohio Landscape Association magazine gives some numbers.
Donnellan says that an investment of $500,000 will produce enough income to withdraw $3,000 per month for 30 years. His calculations assume an average rate of return of 6%. Owners thinking of retirement should be talking with someone to make plans!
The National Association of Landscape Professionals Foundation says they expect our industry will add 60,000 new management positions added within the landscape world in 2016. Wow!
New construction took some slight hits this year. Personally, I think it’s mostly weather related. There is good news in the Housing Market Index from the National Association of Home builders. Their index measuring builder confidence is at the highest number (62) since October of 2005. Portends a good couple of years coming up.
Here’s an odd number from research done by an entrepreneur starting an online landscape service business. He says the typical landscape owner/manager works about 70 hours per week during the season. Sounds reasonable. However, only a little over 30% is billed time. Wow, that one surprises me!
Reported earlier this year was the Landscape & Irrigation magazine list of landscape trends. One of the leading trends was a more low-maintenance landscape design. Seems that trend dominated this year with contractors reporting 60% of their clients specifically asked about making the landscape less maintenance intensive.
Some other findings, budgets are not as high as pre-recession. Really, who would have thought? But more people are spending. 52% of homeowners have a budget of $5,000 or less. 20% budgeted more than $20,000. However, 33% ended up spending more than $20,000. Moral; budgets tend not to capture all people want to do and they are willing to spend more.
Homeowners are spending more time outside and demands are increasing for nicer outdoor living environments. Everything related to that is seeing great demand. Outdoor lighting is the top requested upgrade once again.
