After the results of the elections became clear, the future of business in the United States became more uncertain, once again. Note the collapse in the stock markets and devaluation of the American Dollar. So goes business, well so goes our economy and the financial health of every citizen.
The past four years have been a steady, although extremely slow, recovery time from the huge declines we lived through in 2008-2009. Realization that we now face four more years of our current administration had an unsettling effect on companies nationwide. The nagging uncertainty continues.
We are in a period of extreme uncertainty and business is responding by holding back. Plans for expansion and hiring are on hold as company leaders await signals of what we can expect moving forward. Many issues cause concern.
Taxes
You’ve heard the terms “Fiscal Cliff” and “Taxaggedon”. Which refers to the couple dozen tax increases scheduled to hit in January. If all these taxes indeed happen, they are projected to cost our economy 2-3 percentage points. Given our growth rate is only a little more than 2%, means we would be back in negative growth again. The politicians (all but a few have no business knowledge or experience) are playing this out to the brink. Expectations are many of the tax increases will be rolled back thus avoiding another government induced recession. Let’s hope the analysts are right.
Regulations
Obama’s former climate czar, Carol Browner, recently stated to a gathering of environmental groups, “President Obama has a big green to-do list for 2013 so they will get what they want.” The EPA has about 30 major new regulations they held off until after the election to impose. Those regulations will soon start hitting the street. For some reason the EPA and other government agencies are really after the coal, gas, oil industry, and several types of manufacturing. Political resistance is starting to boil because these regulations tally out to cost our economy many billions of dollars. The pundit types expect many or most of the regulations will be toned down or delayed. Let’s hope they are right.
Add to that the implementation of the healthcare program, worsening European economy, and worldwide political instability and you can see why many are very anxious. When faced with uncertainty, businesses do not spend money. And that is precisely where we now are. We need some foundation.
But there are signs for hope. First off is the resiliency of the American people. There are still enough Americans who want to improve their lot in life and are willing to risk and work hard. Whatever the hurdles, business will find a way. The invisible hand cannot be controlled or destroyed by government.
Second, while business spending has come to a halt, personal spending continues. The American consumer is holding up our economy right now. And for that matter, the rest of the world.
Given all of that, for 2013 the Green Industry will be OK. Many of the worries that loom before us will be dealt with, at least partially. Irrigation & Green Industry magazine projects overall growth for the landscape trades to be 7-9%. What factors will help us?
Commercial Construction
Not all sectors of commercial construction will see growth in 2013. But those that benefit the landscape trades do appear to have growth coming. Namely office facilities, multi-family housing, restaurants, and hotels. Small growth around 4%.
Residential Construction
Housing starts were up about 35% in 2012. Home values have risen around our area (not true for many parts for the nation) and the excess inventory of unsold homes continues to fall. Slight improvements that mean more homes will be built. Expectations are for new construction growth to be around 12% for our area.
Home Remodeling
A bright spot during this painfully slow recession recovery. People know they cannot sell their homes for a profit so they are staying and investing in their life style wish lists. Landscaping services have benefited dramatically the past three years. That will continue.
So, the way it looks right now is we will see pretty much a repeat of 2012 with a little improvement in some sectors that benefit the Green industry.
