In normal circumstances, the month of December gives people the chance to reflect on the success of the previous year, while eagerly anticipating the promise of the future. In most cases, celebrating the New Year is an act of tradition and a special time for optimism. But these are not normal circumstances.

The devastating terrorist attacks against the United States on September 11, 2001, brought the country to its knees in shock and grief. The attacks resulted in the loss of thousands of innocent lives and the destruction of some of the nation?EUR(TM)s most recognizable landmarks. As the country mourned for those lost in the attacks, financial leaders braced themselves for an unknown future. Fortunately, the economy withstood the initial blow. But experts say it will be impossible to estimate exactly how the war on terrorism will impact the future of the country.

For the past decade, the strength of the nation has relied heavily on the consistent growth of the United States economy. As a result, landscape architecture has benefited from the financial resources available in both the public and private sector. However, a recent drop in the gross domestic product - the total output of goods and services produced in the country - was the biggest decrease since the first quarter of 1991, when the country was in the depths of the last recession. The weak performance reflected a sharp pullback by consumers in spending, which slowed to the slowest pace in more than eight years.

Economic strategists, who had already predicted a recession prior to September 11, further downgraded their forecasts after the attacks. The Department of Commerce reported that the economy, battered by the yearlong slowdown and the immediate jolt of the terror attacks, shrank at a 0.4 percent rate from July through September, a decline that could signal the end to the longest economic expansion in U.S. history. Exactly how the country?EUR(TM)s current financial instability will impact the landscape design profession remains unknown. However, the future may not be as bleak as some predict.

Living in a Global Village

The annual LASN Forecast edition is a compilation of economic indicators and industry projections that enable readers to get an inside look at the future of the landscape profession. Last year, LASN accurately predicted a drop in the overall economy in 2001 that would continue throughout the first quarter of 2002. The terrorist attacks and the uncertain state of international relations will not change that prediction. In fact, LASN predicts that the Dow Jones could reach 10,000 points by January 1, 2002, a full 400 points higher than it was prior to September 11.

Like any other business, much of the growth or decrease in activity will depend on consumer reaction to the slowdown. "The parameter that will indicate whether our business grows or declines is the American people themselves," said Joe Simpson, Director of Sales-Projects for Sportexe in Greenacres, Fla. "Unfortunately, war generates the economy."

As LASN reported last year, the 1998/99 ?EURoeboom years" for housing starts ended with a downward trend in 2000 because the number of first-time homebuyers decreased by approximately 8 percent. Housing starts will continue to drop slightly through the first quarter of 2002 but will see an increase to 1.52 million units by year-end 2003.

Simpson says the U.S. economy will be dramatically impacted if the country allows terrorism to influence the way Americans spend money. "I feel that we may slip into the Japan syndrome. That is?EUR? everyone has money but is afraid to spend it," Simpson explained. "The syndrome caused the Japanese economy to almost collapse. Everyone was afraid about the future so they began hoarding their money. Interest rates fell to an all-time low, businesses closed, lay-offs mounted, and no one spent money to spur their economy. This could happen to us if we let terrorism put us in fear and restrict our everyday normal way of being Americans."

Fortunately, that scenario will not happen in the United States. LASN predicts that the economy will actually be strengthened by a significant increase in consumer spending on large, asset-oriented products, such as cars and homes. Knight Kiplinger, founder of The Kiplinger Letter, an economic forecasting report, said that the uncertain economy would not stop people from making major purchases, such as buying a new home. "If people have the financial ability and the timing suits their needs, then they'll follow through. There are a lot of question marks right now, but no one is going to put off buying a house because of this."

One of the direct results of the terrorist attacks is that overall military spending for FY ?EUR~02 was increased nearly 17 percent over FY ?EUR~01 expenditures. Source: The United States White House.

Ironically, the United States may be one of the least affected economies of the war on terrorism, even though the initial attacks happened on U.S. soil. The economies that may be most affected are those in developing countries. According to the World Bank Group, the September 11 terrorist attacks will hurt economic growth in developing countries worldwide in 2001 and 2002, condemning as many as 10 million more people to live in poverty next year, and hampering the fight against childhood diseases and malnutrition.

As one of the world's largest sources of development assistance, the World Bank is comprised of organizations representing all aspects of the economic global village. Before September 11, the Bank expected growth for developing countries to fall from 5.5 percent in 2000 to 2.9 percent in 2001 as a result of slowdowns in the United States, Japan and Europe, and then rebound to 4.3 percent in 2002. But since the attacks may delay recovery for wealthy countries until 2002, the Bank now warns that developing countries' growth could decrease by 0.5-0.75 percentage points in 2002.

As LASN reported last year, housing starts for residential buildings decreased in 2000 for single family housing. First-time homebuyers were forced out of the market because of higher mortgage rates in 2000. However, over the next four years the number of units for residential buildings will rise from 1.089 to 1.289 million by 2005 and barely meet demand if interest rates continue to hang below 7%.

"We have seen the human toll the recent attacks wrought in the U.S., with citizens from some 80 nations perishing in New York, Washington and Pennsylvania. But there is another human toll that is largely unseen and one that will be felt in all parts of the developing world, especially Africa," said World Bank President James D. Wolfensohn. "We estimate that tens of thousands more children will die worldwide and some 10 million more people are likely to be living below the poverty line of $1 a day because of the terrorist attacks. This is simply from loss of income. Many, many more people will be thrown into poverty if development strategies are disrupted."

There are already signs that higher costs and reduced economic activity are putting a damper on global trade. Insurance and security costs and delays at customs clearance areas are among the main factors pushing up the costs of trade. Major shipping lines, for example, have increased freight rates to India by 10 to 15 percent and tourism-related trade flows are being hit exceptionally hard. Around 65 percent of the holidays booked for the Caribbean have been canceled, and areas such as the Middle East are likely to suffer a sharp decline in tourism revenues during the coming winter.

The drop in 2001 for multi-family housing was due to an overwhelming desire for single family housing and a rejection of the anti-sprawl movement to condense neighborhoods. A feeling against increase density is due to higher crime rates and positive (i.e. downward movement) of interest rates for homebuyers. Starting in 2003, LASN predicts that multi-family housing will see an increase of more than one billion dollars as children of baby boomers begin to venture out on their own and rent apartments.

The ripple effect of the terrorist attacks is just starting to show. In New York City alone, City Comptroller Alan Hevesi predicts that the area will lose 100,000 jobs by year's end. Unemployment, as tracked by the state Labor Department, has jumped from 5 percent to 6.3 percent in two months (the national rate is 4.9 percent), and those figures do not yet take into account the consequences of the World Trade Center disaster. About 12,000 workers applied for unemployment in October, up from fewer than 6,000 in the same week last year. Budget stewards project a city deficit of $3.3 billion next fiscal year, which will force the new mayor to shed tens of thousands of public jobs. "Combine terrorism and Anthrax with what was already a weak economy and you could have a severe recession in the city," said James Parrott, chief economist at the Fiscal Policy Institute, a labor-funded think tank. "The job loss could be enormous."

The issues facing New York City will not be contained to that area alone. The City?EUR(TM)s job losses resulting from the terrorist attacks will have a major financial impact on other states. LASN predicts that a large number of skilled workers will be forced to leave New York because of the unemployment situation. These mostly white-collar workers will migrate to other states that have lower unemployment rates, such as California, Florida and Texas. Another possible scenario is that these same skilled and educated workers will accept positions they are overqualified for in order to stay in New York City, thereby displacing workers will fewer skills. If this happens, these lesser skilled workers may be forced to leave the state to find employment.

The Future Landscape

In the next few years, LASN predicts that an increase in consumer spending on asset development instead of knickknack purchases will drive up the renovation market. As LASN reported last year, residential construction improvements will grow more than $1 billion dollars in the next 2 years. Starting in 2002, the amount of funds spent annually on residential improvements will rise from $68.5 billion to $71.5 billion in 2004. Some experts feel that this growth will offer an additional opportunity for designers to explore. "Landscape Architects should look into working on re-modeling, renovation projects. Smaller things that people will be willing to fund," said Dr. Marc Hoit, Interim Associate Dean for Research, College of Engineering, University of Florida.

Along with other construction-oriented services, Landscape Architects are in a unique position. The landscape design profession may be less affected by a weakened economy than other fields simply because of the time needed to finalize individual project plans. When it comes to creating project plans, the lengthy (and sometimes dreaded) design approval process may be what saves the profession from experiencing significant stoppage. "The lag-time for construction-oriented services is greater than other areas. Construction projects have a one to two year lag," explained Dr. Marc Hoit, Interim Associate Dean for Research, College of Engineering, University of Florida. "The planning, funding and start of the project may be two years before the actual work. As a result, new projects can be expected to slow down early next year and take to the end of 2003 to revive."

However, the projects already set in motion should keep the profession busy for the immediate future. By the time the current crop of work is completed, the economy may be on the rise again just in time for the next wave of projects. "It appears that most structural, geotechnical, and general construction firms have projects to keep them busy, in many cases very busy, for the next several years," said Professor Stein Sture, University of Colorado at Boulder.

The technology sectors, which fell about 20 percent in growth in the first two quarters of 2001, will hold down the office markets. For example, office vacancies had been predicted to rise by about 10 percent by the end of 2001, but according to some experts, there may be a greater rise in vacancies going into next year. However, due to the loss of more than one million square feet of office space in New York City, this will work to counteract vacancy increases. LASN predicts that construction of office buildings will rise to $43 billion by 2003.

Most landscape architecture firms can further ensure survival if they begin to diversify their design applications, such as exploring niche markets. Areas for growth will be seen in re-modeling and renovation projects, erosion control projects, lighting design, playground safety design, anti-terrorism

design and campus design. LASN predicts that there will be a boom in Parks and Recreation projects, with the skatepark industry showing tremendous growth in the next few years.

A New Way to Design

Educational construction will also rise as more professionals return to school requiring construction of additional universities. Continued population growth will increase the demands for elementary and high school buildings. LASN predicts that construction for educational buildings will grow to $9 billion by 2004.

Landscape Architects will need to learn a new way to design. Some experts feel that there will be significant changes in the way buildings and surrounding landscapes are designed. According to Mack R. Cain ASLA, Director of Landscape Architecture and Planning, Jordan Jones & Goulding, the events of September 11 will have a major impact on the design world. "As with every disaster in our history, we have used it as a lesson to evaluate our design standards. Those things that we have accepted as the unchangeable formula, may very well not be the right answers."

Cain says that there will be tremendous changes in placing tall structures, tightly fitted together in a very dense environment. "We will all look closer at the need for more open space and usable space with in our urban designs. Safety and access will become an even greater issue in the future," Cain said. "Just as the Titanic, that unsinkable ship revolutionized the ship building industry and safety standards. The Twin Towers will forever alter the standards of high rise design, safety, escape, access and security."

Median household income in the United States was $42,148 in the year 2000. This value equaled the value for 1999, the highest level ever recorded in the Current Population Survey (CPS), in real terms. Hispanic (who may be of any race) and Black households hit new all-time highs in median income of $33,447 and $30,439, respectively. The median household income of White non-Hispanic ($45,904) and Asian and Pacific Islander ($55,521) households equaled their highest levels ever recorded (in 1999) in the CPS. In September 2001, real disposable personal income decreased 0.6 percent at a seasonally adjusted monthly rate. Source: Economic Statistics Briefing Room, The White House.

Now more than ever, Landscape Architects will have to learn how to maintain the integrity of the design while making sure the project is structurally sound. "It will be beneficial for Landscape Architects to learn more about designed site-safety, issues related to structural safety, and how to design a constructed facility to minimize loss due to terrorist attacks, as well as extreme environmental loading such as earthquakes, hurricanes, tornadoes and floods," Sture said.

Sture believes that the landscape profession and construction industry is impacted to the same extent as other civil-engineering based services. "The issue of safety has clearly been brought to the forefront and is high on the national agenda," Sture said. "While we are familiar with general structural safety, especially in earthquake prone areas, [the issues of] impact, collision, and terrorist attack scenarios will have major influence in designs of future high-rise buildings, certain safety-critical federal and state buildings, such as embassies, military installations, tunnels, dam-reservoir systems, airports and related installations."

Another Door Opens

Last year, LASN reported that a strong office market at a nine percent national vacancy rate will counter the slowdown in hotel/retail as the nonresidential market will begin to rise at a 3-5 percent rate in 2002. As predicted, hotel construction was up 3.4 percent in 1998/99 (the "boom years") but, as 2000 came to a close, hotel construction was down 2.5 percent from those years. Due to the war on terrorism, the travel industry will see a continuing slowdown in resort development with a modest gain through 2004.

When an artist sits down to create a great design, the furthest thing from his or her mind is politics or terrorism. When creating a design, most Landscape Architects think of how to best beautify the location. They don?EUR(TM)t think of how a potential terrorist attack may affect the design. But in today?EUR(TM)s current political climate, designers will need to address the issues brought on by terrorism and adapt to the architectural changes sure to come.

Some experts feel that the war on terrorism gives Landscape Architects a rare chance to impact the world as the profession increases its awareness of environmental issues. "Losses at the national level due to extreme environmental loading runs in the 100's of billions of dollars each year," Sture said. "Finding ways to minimize losses through design should be a major concern, as well as an opportunity for the profession." Saving money and becoming more environmentally efficient may be one of the most positive results of country?EUR(TM)s current international struggle. Projects will need to be more structurally sound and economically viable in order to grow the profession.

Approximately $3 billion dollars was added to the guaranteed federal funding level for highway spending in 2001. LASN predicts that public construction for highways and street development will reach $42.9 billion by 2004 due to increased focus on infrastructure repair and development.

But whether or not the landscape profession will take the initiative to explore new opportunities remains unknown. What is known is that, so far, the U.S. economy has shown amazing resiliency. Although the future is unsure, many people within the profession feel optimistic about the year 2002 and beyond. The industry will be impacted, but maybe not as severely as first thought. One thing is certain?EUR?as long as there is land, there will be a need for Landscape Architects.

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