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LCN Publisher's Page March, 200403-01-04 | 11
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Along with Growth Comes Competition

By George Schmok

Whew…

With spring upon us, the landscape industry is beginning to pick up again across the country. Having made it through a busy winter trade show season, LCN spoke to literally thousands of professional from all corners of the country. From almost every viewpoint, 2004 looks to be a great year for the business.

In fact 2004 could be just the beginning of several years of moderate to strong growth. The Portland Cement Association recently predicted that the full recovery wouldn’t happen until 2005. As such, the landscape business is in position to experience growth.

The PCA is not the only one predicting growth for the business…The Bureau of Labor Statistics released its projections of employment growth for the years 2002-2012 on February 11. According to their findings, “Construction is the only goods-producing sector in which employment is projected to grow.” (To read this article, go to landscapearchitect.com and search for “In the Clear”).

But not all is perfect in the town of Perfection, for along with growth comes competition…As one survey conducted by the LCN research team at the CLCA show revealed…37.9 percent of the attendees surveyed (those that came by the booth…) indicated that they had been in business for less than five years. Of those, 63.4 percent had five or fewer employees. So my interpretation is that a lot of guys are getting small crews together and striking out on their own.

It will be interesting to see if the increasing number of crews will drive the price down or if there’ll be so much work you’ll get to hold the line…One thing is for certain, the price of doing business is going to go up. And this could be the one area where the industry may struggle.

Due to rising fuel costs and (no kidding) demand for steel in China, the cost of building buildings is rising. Over the past six weeks (today is March 9) the cost of steel has risen by 25 percent and the cost of fuel has jumped some 20 percent. Still, no one is yet saying these prices have hit their apex…This means more money spent on materials and deliveries and less on wages and less on landscapes. If interest rates suddenly start to jump, the cost of doing business could be something that gets adjusted on a day-to-day basis.

So with one eye on opportunity and the other on the road, the next few years will be full of growth (don’t forget a predicted 15 percent growth in the general population…) Just watch for those detour and potholes along the way…

See you next month…


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