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Landscapers Expect Stronger 2010
Posted: November 16th, 2009 01:54 PM EDT
While 2009 has been a challenging year for most landscape contractors, the resilient maintenance business has helped offset some of the heavy losses on the installation side. Looking ahead to 2010, more contractors expect installation business to improve while maintenance continues to hold steady.
PRO Magazine, a national trade publication serving landscape contractors across the United States and Canada, recently concluded an extensive readership study. Contractors were asked a series of questions regarding 2009 sales activity, along with what their expectations are for next year – 328 completed surveys were gathered, producing a sampling error of +/- 4%.
According to the survey results:
78% of landscape contractors have annual sales below $1 million
86% perform landscape installation
51% perform irrigation
94% perform landscape maintenance
78% perform lawn care (fertilizing, etc.)
47% perform snow removal
Sales Summary for 2009
Installation – Down more than 20%
Irrigation – Down more than 20%
Maintenance – Flat to up slightly
Lawn Care – Flat
Snow Removal – Flat to up slightly
Sales Expectations for 2010
Installation – Flat to up slightly
Irrigation – Flat
Maintenance – Flat to up slightly
Lawn Care – Flat to up slightly
Snow Removal – Flat to up slightly
Commercial Market
Roughly 90% of landscape contractors service commercial accounts. For the majority, less than half of total sales come from these customers.
Of those contractors who do not service commercial accounts, 90% are smaller contractors with annual sales under $1 million. In other words, larger landscaping companies are naturally more inclined to target commercial clientele.
Looking ahead to 2010, most contractors expect to see stabilization in each of the primary industry segments, even in the hard-hit installation and irrigation segments.
Installation – 30% expect a sales decline
Irrigation – 22% expect a sales decline
Maintenance – 11% expect a sales decline
Lawn Care – 14% expect a sales decline
Snow Removal – 13% expect a sales decline
Residential Market
Roughly 90% of landscape contractors service residential accounts. Of those who do not, 56% have annual sales in excess of $1 million. Again, larger contractors tend to turn their focus to the commercial market.
Looking ahead to 2010, most contractors again expect to see market stabilization.
Installation – 25% expect a sales decline
Irrigation – 29% expect a sales decline
Maintenance – 14% expect a sales decline
Lawn Care – 16% expect a sales decline
Snow Removal – 20% expect a sales decline
Niche Services Offer Growth Opportunity
Landscape contractors with annual sales in excess of $1 million are much more likely to perform a variety of niche services. At the same time, of those contractors who are looking to break into niche segments of the industry, the overwhelming majority are smaller contractors.
Hardscaping – 63% perform, 8% want to
Water Features – 45% perform, 13% want to
Outdoor Lighting – 44% perform, 15% want to
Holiday Decorating – 18% perform, 14% want to
Tree Care – 47% perform, 6% want to
Aerating – 69% perform, 5% want to
Erosion Control – 46% perform, 6% want to
Hydroseeding – 29% perform, 8% want to
Rain Gardens – 17% perform, 13% want to
Green Roofs – 7% perform, 14% want to
Finding, Retaining Customers Still Challenging
A variety of critical issues continue to affect a landscape contractor’s ability to successfully manage through these challenging times.
Ability to find new customers – more important to bigger contractors
Ability to retain customers – more important to bigger contractors
Controlling overhead – more important to bigger contractors
Increasing field productivity – more important to bigger contractors
Increased competition, pricing pressure – more important to bigger contractors
Maintaining truck and equipment fleet – equally important to all contractors
Adding new services – more important to smaller contractors
Ability to find/keep employees – more important to smaller contractors
Water conservation – equally important to all contractors
Sustainability, green movement – equally important to all contractors
Equipment Purchase Intentions in 2010
Stability in the landscape maintenance business, coupled with favorable expectations for 2010, have many contractors gearing up to invest in new maintenance equipment next year.
Mower – 63%
Trimmer – 60%
Blower – 38%
Chainsaw or Pole Pruner – 38%
Truck – 38%
Trailer – 38%
Aerator or Dethatcher – 22%
Chemical Sprayer – 22%
Also, mirroring the average contractor’s desire to grow sales and improve equipment utilization through add-on services, 26% of landscapers anticipate investing in various implements for their mower, loader or tractor.
