Overall, 2013 was a good year for landscape contractors. Based on a recent survey of those who read, Green Industry Pros, our sister publication, most landscape contractors took another step forward in their now four-year recovery since the industry took a pounding in 2009. The "landscaping services industry" is now at its largest volume ever (roughly $70 billion), and is expected to continue growing at a modest but healthy rate for the next five years.
According to the survey results, roughly half of contractors said both landscape installation and maintenance business was up this year, 39% said lawn care business was up, and 19% said irrigation was up. The majority of those contractors said that growth was less than 20%.
Some contractors did have a tougher time this year, proving that we're still in a business environment where stealing market share is critical to achieving above-average growth. Roughly 24% of contractors said installation business was down, 27% said irrigation business was down, 14% said lawn care business was down, and 12% said maintenance business was down.
Still, green Industry professionals remain an optimistic bunch. More than half of contractors expect both installation and maintenance business to improve next year, roughly half say lawn care will improve, and 35% expect irrigation business to get better. Few anticipate seeing a sales decline. Most expect growth to be less than 20%, although one in five contractors expect maintenance sales to grow by more than 20%.
Finding employees top of mind again
For the past several years, the soft economy and increased level of competition were foremost issues in the minds of landscaping contractors. Many are now more concerned about finding employees to keep up with expansion goals—another sign of improving business conditions.
Roughly 36% of contractors added maintenance laborers this year, but 45% plan to do so next year. Additionally, 29% plan to hire additional maintenance foremen, compared to just 20% that did so this year.
More contractors (38%) also plan to hire additional installation personnel next year; just 29% added staff this year. Then, 23% plan to hire more foremen, compared to just 17% that did so this year.
Contractors also plan to hire more help for their lawn care divisions in 2014. About 31% plan to hire more techs; just 21% did so this year.
Few contractors (less than 10%) plan to reduce field staff next year in any of their three main service centers (installation, maintenance, lawn care).
One area most contractors are not looking to grow payroll is in general overhead. Just 17% are looking to hire more managers, while just 12% plan on hiring extra administrative help.
Pricing is recovering
For most contractors, the days of having to cut employees could be behind them. Likewise, the days of having to slash prices could be fading into memory, as well.
Most contractors think they'll be able to raise prices with at least some of their clients next year. Commercial accounts are going to be a little more difficult.
- Residential Maintenance – 16% indicate there's no way they can raise prices, 45% said they might be able to with a few clients, 16% said they could with half, 16% said they could with most, and 7% indicated they might be able to increase prices with all customers.
- Commercial Maintenance – 25% no way, 42% with a few, 14% with half, 12% with most, 7% with all
- Residential Installation – 17% no way, 37% with a few, 12% with half, 22% with most, 12% with all
- Commercial Installation – 30% no way, 37% with a few, 11% with half, 14% with most, 8% with all