DUBLIN—Research and Markets has announced the addition of the “Landscaping Services in the US” report to their offering.
According to the report, the landscaping services industry has had a difficult few years coping with the slump in demand from residential, commercial and institutional clients due to the economic downturn. During the past five years, the substantial decline in construction activity, combined with the drop in consumer spending, reduced the industry’s customer pool. IBISWorld expects industry revenue to decline at an average annual rate of 1.7% to $61.4 billion in the five years to 2012.
The collapse of the housing market led to falling property values, foreclosures and more stringent standards for homebuyers seeking financing. As a result, fewer homes with yards and patios needed landscaping and yard maintenance. During the recession, financially strapped homeowners cut back on spending by performing yard maintenance themselves instead of contracting industry services. Others canceled or postponed plans to upgrade or remodel their patios and yards.
Similarly, the down economy slammed the brakes on the construction of new resorts, retail centers and corporate campuses that required landscaping. Low consumer spending led to branch closures, layoffs and bankruptcies, while property owners at existing shopping centers, office developments and other commercial spaces faced high vacancies, which reduced revenue for landscaping services. Municipalities and institutional clients like schools and hospitals were less affected by the recession, but weakened demand led to intense competition among industry operators, forcing firms to lower prices for bids on larger projects. Further, because of depleted tax revenue, some municipalities limited spending on landscaping services at parks and other public spaces. Intensified price competition forced firms to offer discounts that put pressure on margins.
Nonetheless, the industry is bouncing back as the economic recovery gains momentum and construction activity picks up. A strong rebound in the multifamily housing market is creating demand for landscaping services at apartment buildings and condominiums. Over 2012, industry revenue is expected to grow 4.2%, largely driven by an increase in per capita disposable income and a 20.1% increase in housing starts. In the five years to 2017, revenue is forecast to grow at an average rate of 4.0% per year to $74.9 billion. During this period, the number of operators is projected to grow at an annualized rate of 3.4% to 493,096 firms. Small operators and non-employers will drive much of this growth.
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