Georgia contractor John Newman installed this front facade at this English Country Estate.
Myriad Botanical Gardens is the central open space in the newly renovated downtown and features a variety of amenities to attract people from all walks of life to a world-class destination in the heart of Oklahoma City. (Site rendering courtesy of The Office of James Burnett.)
A lot of people are also gravitating toward the color orange. Echinacea 'Tiki Torch' is a great example.
Most landscape installation contractors have spent the past three years trudging along in a historically weak market. The main drivers of growth are improving, though, and most contractors are feeling pretty good about their prospects going forward.
A fall 2011 survey of Green Industry PRO readers suggested that roughly one-third of contractors grew installation sales last year. Roughly half expect sales to grow this year. Only 7% anticipate a reduction in installation business.
So far this year, most contractors are holding firm to their predictions. Scott Parker, whose New Jersey-based company is profiled in this issue, is one example. "We are seeing a drastic increase in consumer demand," Parker says. He attributes this to the following:
- Economy seems to be improving (as of early spring) and many consumers have a better idea as to what their personal job stability and financial situation are
- In New Jersey, fall storms have revealed faulty or inadequate drainage systems and have devastated trees and plantings
"We are simply seeing many homeowners who are looking to repair their landscapes due to the hurricane and ice storm we experienced," Parker adds.
A look at the two big drivers: housing and construction
As you can see, Mother Nature's havoc can sometimes work in favor of landscape professionals. However, the best indicators of both present and future prosperity are directly tied to two things: residential housing and commercial construction.
On the housing front, March data was still throwing mixed signals. According to the National Association of Home Builders (NAHB), newly built, single-family home sales were down 7% from February. But February had proved to be much stronger than expected. Thus, sales for the entire first quarter were up 3.7% from the fourth quarter of 2011. More importantly, March sales were 9% higher than one year ago.
March construction spending data from the U.S. Census Bureau of the Department of Commerce also paints a favorable picture. Residential construction spending—which also includes multi-family units such as apartment buildings and condominiums—was up 6.5% from a year ago.
It's a somewhat similar story for non-residential construction. Spending was up 5.7% in March as compared to one year ago. The best-performing segments include manufacturing (+39.6%), power (+19.2%), commercial (+8.9%) and public safety (+7%).
These are all positive signs that show continual improvement in the housing and construction markets. Still, research firm IBISWorld indicates that growth will remain measured over the next several years. In fact, the market will not return to pre-recession levels until 2016. That means landscaping industry growth will likely remain in line with overall economic growth until that time.
Contractors that specialize in bid/build understand this better than anyone. Maryland-based Ruppert Landscape is one example. "Thankfully, we are starting to see the bid/build market pick up now," says Amy Snyder, director of public relations. "Our customers are all getting busier. Typically, architects get busy, then the general contractors, and then a year later the landscape contractors feel it. So this year is a lot better, but we're really expecting to see some solid improvement in 2013."
How to outpace overall industry growth
Broader market coverage. Snyder says that Ruppert's broad market coverage has been a real blessing. The company operates several branches and offices in Maryland, Georgia, Pennsylvania, North Carolina and Virginia. However, its ability to travel as far away as Oklahoma has helped offset the effects of a slow economy.
"We did a huge project called Myriad Botanical Gardens in Oklahoma City last year," Snyder tells. The project spanned from August 2010 through October 2011 and employed roughly 150 people at times. "We've now established a national branch where we are pursuing more national contracts like this. We're getting some of that work through established contacts. But it's really about being willing to go out and get the business and do the travel. You also have to be capable of doing it."
New services. Contractors such as John Newman of Classic Landscapes in Hampton, GA, have been looking to new services in order to increase sales. "Business hasn't been as good as we'd like, but it's getting better," Newman says. "We've learned some things and added some new services over the past few years. For example, we've added LED lighting to the mix. We're talking to existing customers about converting over to LED. Once we explain the benefits (reduced energy costs and longer bulb life), they really like it."
In the commercial arena, Ruppert Landscape has seen an explosion in demand for green roofs, primarily among office and government buildings in an urban setting. "A lot of what goes into these green roofs are lightweight soil mixes, foam media for insulation, and green roof pavers," says Mike Ward, Ruppert's director of pre-construction services. Green roof pavers are designed to be lighter, less emissive and less reflective.
The primary driver behind the increase in green roof popularity is a builder's desire to achieve LEED-certification for a building, which means the building meets a certain standard for energy efficiency and environmental friendliness. Green and sustainability are two buzzwords that have continued to gain traction in the landscaping industry. How much traction they gain in your area can often come down to how you market them.
"I think the term sustainability is a bit overused," Newman relates. "But everybody wants low maintenance. That seems to be a more effective way of marketing it. We're looking at things like low-volume irrigation, less turf where it makes sense, low-maintenance plant beds and dry creek beds, for example."
Newman has also adopted an organic approach when it comes to new plantings. "We don't use high-nitrogen fertilizer anymore," he points out. "We now put down beneficial soil microbes like mycorrhizal in the backfill with organic compost. We've had very little plant death. It does add a little cost to a job, so be prepared to educate the client."
Better sales process. Be careful, though. Throwing too many scientific, fancy-sounding terms around may cause the client to turn skeptical. The bottom line, though, is that the client wants what works. They also want—or perhaps need—to stay within their budget.
"In the past, we could walk away from an initial client meeting and come back with a huge proposal that the client would typically go for," Newman relates. "Not today. Now we won't leave that first meeting without a budget, or at least a first-phase budget. If you don't do that, there's a good chance that you'll end up pricing yourself out of contention."
The bid/build world also remains very budget-conscious. According to Ward, Ruppert Landscape is asked to value engineer roughly half of the designs it is given. "We go through and look at what the architect specified, looking for lower-cost alternatives that will not affect the design intent of the architect," Ward says. "An example is polystyrene foams for green roofs. Expanded tends to be less expensive than extruded, but still works very well."
Trends in landscape design
A budget-conscious general public is a trend landscape contractors will likely continue to face for a while. Here's a look at some other trends in landscape design.
Outdoor living spaces still hot. The American love affair with the back yard shows no signs of letting up, according to a recent study from the American Society of Landscape Architects (ASLA). Roughly 91% of landscape architects said outdoor living spaces remain quite popular. Defined as kitchen and entertainment spaces, the following elements are in high demand:
- Fireplaces or firepits – 95.8%
- Dining areas – 95.7%
- Landscape lighting – 93.1%
- Water features – 89.9%
- Installed seating – 86.9%
- Weatherized outdoor furniture – 81.2%
- Spas – 80.4%
- Pools – 79.2%
When it comes to pools, designer Gina Samarotto says people are moving away from free-form style to linear. A lot of people are also gravitating toward the color orange. "The 2012 Pantone Color of the Year, Tangerine Tango, can definitely be seen in the landscape," says Samarotto, principal at Samarotto Design Group in the greater New York City area. "Echinacea 'Tiki Torch' is a great example."
Hardscaping represents another popular outdoor living feature that's showing no signs of letting up. "(In commercial), we're seeing requests for a lot more pavers and natural stone work than concrete," Ward says. In the residential business, Newman says that he's seeing quite a bit of demand for smaller jobs like patios and walkways, although large jobs like complete driveways have fallen off a bit.
According to the ASLA report, permeable pavers are really picking up steam; 71.6% of landscape architects said they are popular. Permeable pavers speak to not only the outdoor living craze, but also sustainability.
Other sustainable landscaping features also ranked high in the ASLA report. They include:
- Low-maintenance landscapes – 96.6%
- Native plants – 86.3%
- Drip irrigation – 81.7%
- Food gardens – 81.2%, more than half of which prefer organic