Construction Spending is a mixed bag of information. June has always been a growth month for construction spending. But since the recession the numbers have been atypical. June 2013 construction spending declined compared to May but was better than June 2012 spending.
Construction Spending:
- Private residential spending was flat compared to May but 18% higher than 2012.
- New single family construction dropped a little compared to May, but was 28% higher than 2012.
- New multi-family dropped 3.3 from May, but is 41% ahead of last June.
- Private commercial spending fell a bit, but up 1.4% over last year.
- Public spending fell 1.1% and was 9.3% lower than last year.
Expectations are for private spending to slowly increase while public spending will continue to fall. Housing, while not growing quickly, is on a steady pattern of increases. Many expect a slug of commercial property spending coming along. It just hasn’t reached our area yet. We shall see.
Those who supposedly are in the know say the tax and regulatory onslaught we’ve been living through (and have more coming in 2014), will cause a short term slow down in 2014, but will have minor affect on private commercial construction spending. They say these are long term projects that will not be cancelled because of a short term economic slow down.
New Home Sales:
As of June new home sales have surged 40% and are at a 5 year high. The NAHB says the Homebuilder Confidence Index is reporting positive market outlook for the first time since April 2006. Before the recession new home sales reached as high as 1.28 million per year. We’re running at 497,000 now. Obviously the high growth rates we’re seeing still have us nowhere near our pre-recession highs.
Sales of existing homes are strong in most categories. In fact there are shortages. Young families in some cities are having a hard time finding their first home. Part of the problem is the low inventory of good homes on the market. People are staying put, whether by choice or they are underwater with their loans.
Home values have been rising for 16 consecutive months. The last 12 months have seen an increase of 7.4%. If interest rates begin another upswing, the perfect storm (low interest rates and low home prices) for getting a really great deal may be passing.
Trends: Meadowscaping
As a more environmentally friendly landscape option, meadowscaping has resurfaced again. What is it? A purposely planted patch of wildflowers allowed to do its own thing with little maintenance activity. Or as detractors call it, “a weed patch”.
Before we had mechanical mowers most everyone had a meadowscapes. I too like the view over natural meadows, I grew up on a farm with plenty of it. There are many benefits;
- No mowing
- Great wildlife habitat
- No chemicals
- Interesting and seasonal scenery.
- No irrigation
- Very little maintenance. Maybe.
Quickly a well planted meadow will be taken over by more aggressive noxious and undesirable weeds and pioneering trees. Use of machinery or chemicals to control them is difficult, so keeping the meadow full of desirable plants requires a lot of hand work.
Additionally the meadowscape will need cleaned out from time to time. Usually done in fall and spring. Without maintenance the meadow will transform into a woods. Around where I live, a woods dominated by grape vine, poison ivy, and honeysuckle. The long term maintenance requirements have to be considered up front.
Local Cops Are Landscape Angels:
In Bath, Ohio a police cruiser responded to a medical emergency at the home of an elderly man. In the process the cruiser damaged the neighbor’s lawn. The neighbor wasn’t happy and complained. Well, the Police Chief and the officer who did the damage got together and repaired the yard themselves.
Borrowing seed and top soil and using their own tools, they showed true community concern. Earning the accolades from a city trustee who said of the Police Chief, “Provides the highest quality service to our residents without fanfare.”
Where Is the Next Generation?
PLANET has a scholarship foundation, Academic Excellence Foundation (AEF), which tries to help young people enter Green Industry with college degrees. Recently they met to explore how to attract more young people into college programs. Schools are having difficulty getting kids to enter their Green Industry programs. To the point some are dropping them.
Not a good sign for our Green Industry. We need a strong younger general moving up as the Baby Boomers move out. PLANET wants to learn ways to counteract the reasons kids don’t enter our industry.
AEF determined the primary reason young folks aren’t coming is because kids and their parents have a poor perception of the landscaping trades. In fact landscaping is considered a “summer job” not a career. To make it worse, people don’t believe landscaping requires any education or training to enter.
This attitude is not surprising to us who have been part of this great business for several decades. How many times have customers alluded to you how little value they place on our companies and employees?
An irrigation contractor told the story of a customer complaining about his repair bill. No way, he said, his repair could have cost so much. The contractor tried to justify his charges by talking about labor costs. His customer shot back, “your guy is just a hole-digger who shouldn’t be making more than minimum wage!”
That is what we face with some folks. Now consider the conversation that happens when a high school kid tells his parents that he wants to get a Hort degree! With such a low opinion of our industry, the parents will tell their kid no way.
I often hear contractors complain that young people don’t want to manual labor any more. Don’t want to get dirty and don’t want to sweat. Perhaps there is truth to that. But opportunity is most often disguised as hard work. Maybe what the young people don’t see is the opportunity.
AEF points out that young people with education can move up very quickly in our industry. Those with the aptitude very often end up in well paying managerial positions or owning their own company. There is good opportunity but we have to communicate it.
The goal of AEF and our industry is learning how to tell our story to the public.
One solution is an industry web site called www.landlovers.org Geared towards those thinking about a Green Industry career; the site has information about careers, job descriptions, salary ranges, and educational opportunities. The more parents, students, and guidance councilors we can entice to visit will help our industry attract good talent to carry us forward into the future.
