Modest Green Industry Growth Predicted for 2014

Texas A&M's Dr. Charlie Hall shares annual economic outlook
by Ron Hall/Editor-in-Chief
1/20/2014

Although I've never had the pleasure of meeting Dr. Charlie Hall in person, I have great respect for him. I've heard him speak on several occasions, and I look forward to his presentations. His folksy "aw shucks" presentations are as entertaining as they are insightful and informative.

Hall, originally from the mountains of western North Carolina, is a professor in the Department of Horticultural Services at Texas A&M University. He's also holder of the Ellison Chair in International Floriculture there. 

He knows the green industry (especially the nursery business) like few other people in North America. He follows the green industry, its fortunes and the many trends that affect it with the intensity of beagle on the scent of a rabbit.

This past January 17 he shared a modestly optimistic view of the green industry in his annual webinar - The Economic Outlook for 2014.

Modestly optimistic?

He likened its continuing recovery from The Great Recession of Dec. 2007- June 2009 to that of a plow horse - slow but steady. By contrast he said the industry, in years immediately leading up to the 2007 crash, was more like a "race horse."

Slow but steady is not such a bad thing in Hall's mind. In some instances anyway. For example, he pointed to the 18 percent increase in U.S. housing starts from 2012 to 2013 (780,600 in '12 vs. 923,400 in '13). He also referenced the 12 percent jump in housing prices in 2013, as per the Case-Schiller 20-City Home Price Index.

The green industry's success and growth are intimately tied to home building and home sales; the more of both the better. But in this case is such a high level of activity a good thing?

Hall said that both figures are above historical norms and unsustainable in the long run. He said he would prefer the growth to be more in line with long-term trends - slow but steady. He said this likely to be the case in 2014.

The bigger challenge for the green industry is an issue that it has always had and, for whatever reason, can't seem to overcome. That is getting property owners to value their ornamental plants (flowers, shrubs, trees) and maintained landscapes as both necessary and life enhancing rather than something that competes for their discretionary spending.

The Great Recession of 2008-2009 gave the green industry even more proof (as if it needed it) that U.S. consumers don't perceive its products and services in the same light as other life-enhancing industries.

For example, while U.S. consumers slashed their spending on landscape plants or reduced or dropped landscape services during the Great Recession, the amount they spent on their pets never slowed. They climbing more than 5 percent each year, even during the recession years.

Borrowing from a phrase attributed to Lowell Catlett: "People afford what they want."

Sharing charts and other visuals from various financial, governmental and industry sources, Hall predicted modest growth for the U.S. economy and, by extension, the green industry for 2014.

To access the webinar, please click here.