Elections are over, politics go on as normal, and the uncertainty created by government and the sluggish recovery continues. Not much different than a year ago.
The Green Industry in our region had the advantage of very favorable weather in 2012. We had an early start and good working conditions all year. Irrigation was elevated because of a mid-season drought. Many now wonder what weather will do for us or against us in 2013.
Temperatures to Come
NOAH is predicting warmer than normal temperatures for most all of our season. We had similar predictions last year and experienced a much warmer than normal year. My hope is NOAH is right again! NOAH is predicting normal rain patterns. OK, I can live with that. We just don’t want a rainy cold season.
So if weather is normal, maybe a little warmer, that will work. If economic growth continues its slow upward trend, we can have another decent year. Overall I feel optimistic.
Expected Business
Word is out there that a slowdown or recession is coming. The question is when and how bad. Some analysts predict a consumer driven slowdown, maybe recession, starting towards year end and lasting into spring of 2014. We’ll all have to keep our eyes open and react accordingly if that is the case.
Green Industry businesses are drastically affected by commercial and residential construction and the remodeling trends. So far remodeling has been a savior for a lot of landscapers. Spending to improve living environments is expected to continue. Some say it may actually become much stronger.
Home Owners
New home construction is picking up too. Housing values have been slowly increasing. The backlog of empty homes has been selling off. And while at risk mortgages are still 3 times higher than normal, the amount has shrunk to a four year low.
Home ownership is now affordable for many who could not have handled it 5 years ago. Younger people are finally finding some decent jobs. Every time a home is built or changes ownership it creates work for contractors and customers for retail stores. The trending we’ve seen in the last 6 or so months is a welcomed energy input into a feeble economy.
While I am not as optimistic as some, such as the Washington Post, housing is seeing a sustained growth. Expensive rents, low house prices, cheap mortgages, loosening loan requirements, and better employment for young people are all driving growing interest in buying a home.
Mark Zandi, a chief economist at Moody’s Analytics, says the improving housing environment is critical for general public confidence. If it continues, the effects will be widespread throughout the economy and help support long lasting economic growth.
The expectations:
Residential housing starts- McGraw Hill says to expect about a 24% increase in housing starts. Nice!
Commercial construction- McGraw Hill is stating a 6% growth rate for 2013. Institutional and public construction is actually weakening, private investment is growing. We’ll take growth any day.
So 2013 has its promise. Few among the experts would disagree with an expectation of conditions at least equal to 2012. Our industry should be able to do as well as 2012 and maybe a little better. As I write this the temperature is 12 degrees outside, but spring really is just a few weeks away. Have a good 2013.
