With businesses laying off employees in record numbers, the stock market taking two steps back for every one step forward, real estate sales and construction in a terrific slump, big banks clambering for bailouts, the automotive industry screeching to a halt, and many other economic indicators pointing toward signs of doom, you don’t have to be a card-carrying pessimist to believe the U.S. economy is in dire straights. But if you prefer to view your glass as half full, it is possible to find some positive economic signs. While it’s still premature to claim the economy is on the rebound, there is evidence we are leveling off at the bottom. Most financial analysts, however, still believe the recovery trough will be a slower U-shape, rather than a sharp V-shape.
As of this writing in mid May, reports from Standard and Poor’s capital goods industry index, the U.S. Labor Department applications for jobless benefits, and The Conference Board Consumer Confidence Index are all showing hints of improvement. Our readers are also seeing glimmers of hope. In late March 2009, Total Landscape Care asked our readers to give us their take on what’s happening in their local economies, and how they view the national economy. When asked “How confident are you the landscape industry will make a comeback by the end of 2009?,” 17.3 percent of the survey respondents were “very confident” and a surprising 53 percent were “somewhat confident.” Only 4.7 percent were “not confident at all.”
Not all results from our survey were bright and cheery. When predicting how their business would do in 2009 compared with 2008, fewer responders expect a major increase and more expect to drop into a category of slight increase, remain the same, or minor decrease.
Response to the question “What actions have you taken/may you possibly take to address today’s market?” do not bode well for the equipment industry. Sixty-one percent of responders listed “delay equipment purchases,” indicating they prefer to make due with their existing fleet rather than going after new business (49.5 percent) lowering bids (37.6 percent) or any other option. A similar question: “What will happen to the size of the equipment fleet you own this year” indicates a significant majority fall into the two categories “remain the same” (55.5 percent) and “minor increase” (26.9 percent). Most of this purchasing flatline is probably due to landscapers’ self-imposed limits, but it’s no secret that the days of easy credit are over. Either way, it does not appear a lot of iron is going to be flying off the sales lots this summer.
Even when faced with the current economic downturn, 35.4 percent of our responders do not intend to add any services to their current repertoire. While it may be a time to get aggressive with marketing campaigns, landscapers are playing it safe with equipment and add-on services. Why go out on a limb spending money to acquire tools, training, and employees for add-on services when they can sit tight and wait for the economy to straighten itself out?