 Good afternoon. This is Kevin Burkett with the Alabama Cooperative Extension System. I'm a regional extension agent working in the area of commercial horticulture. Today was going to touch on the green sector within commercial horticulture and our agribusiness team was doing some programming related to economic outlooks for different sectors of agriculture and and the thought behind these videos is if we can provide some data and Maybe some insight and analysis into these different markets producers Operators business owners could take that information Hopefully use it to make good decisions for their business and be successful So like I said was going to touch on the green industry with this video So when you say green industry some people may have a pretty good idea of what that means But just a touch on it briefly It would be the landscape services the ornamental Floriculture and turf production that happens within the state so if we think about all of the products and the services and the people and the activities that make Those things that make our yards and our landscapes and our businesses and communities look nice Those are the things that make up our green industry About five years ago. There was a economic impact survey done relayed to Alabama agriculture and at the time they Recorded some job information related to these type businesses and as you can see Green house nursery and floor cultures about 7,000 jobs Retail lawn and garden centers about 3,800 jobs in landscape services the biggest sector at 18,000 jobs So at the time it was about 29,000 I think the industry has continued to grow and expand since then so it's probably Close or past 30,000 maybe at this point But when we're talking about The green industry a lot of times there's not a lot of data out there that we can look at and This is true for Within the state think within the southeast and just just true in general There's not a lot of information out there So we look to some other indicators and some other markets to anticipate how It will affect the green industry businesses So it's strongly tied to our housing market and both the green industry and the housing market would be Tied to our overall economy and and this would kind of make sense. Like if you think about When the economy is doing well when houses are being built people are going to want and spend money on green products and services and As such you can imagine The great recession that happened 2007-2008 and that was strongly precipitated by The housing market crisis It greatly affected the green industry and we'll look at that There's a couple points of data. We'll look at and you can see there was like a there was a strong correlation there So to look at the housing market a little bit there they have what they call the housing market index and This is where they go out and they survey home builders And they say what is your business outlook? Currently and maybe what do you anticipate happening within the next six months or so are you anticipating new business new customers? so anything over the level of 50 is considered a positive outlook and Since about 2014 it is it has been above that level and has continued kind of on an upward Path of growth you might say You'll notice maybe at the end of 2018 there was a there was a downward trend. I Did see a graph the other day that indicated it had Reverse and was more on an uptick So but overall is still above the level of 50 indicating a positive outlook and home sales have increased nationally within the last couple years and Know within Alabama Home sales were up 7% at the end of 2018 over where they were in 2017 so so that's good Dr. Charlie Hall is someone I talked to To get some information and maybe some insight Into this area. He does a lot of work on the economics of the green industry he provided this slide and a number of Some graphs and data for this presentation so Wanted to make note of that and I would encourage you if you're if you have Continued interest in this area Visit his website and maybe keep track of some of the presentations and publications. He would put out during the year but To look at this This is new private housing units authorized by building permits and and kind of follows that same trend of Recovery since 2009 it has been on a positive Growth path. I think at the end of the year there were 1.3 million new starts and something contributing to that is So they talked about the millennial demographic. I think is or is close to being the largest age demographic in the US right now and there at a stage So anybody from the age of 23 to 38 they're at a stage where They finish college Maybe have been out for a couple of years and are starting into more of those career type jobs and also to the to the point of Wanting to make Maybe getting married starting a family wanting to make that first time home purchase so Millennials catch a lot of flak for a lot of different things but I guess moving away from the nest and and finally Getting started on some of that but So that's contributing on the demand side On the supply side, there's a couple things that may be affecting that Lumber prices although I think they've decreased recently had Had been more expensive had been increasing in price There had been a shortage of Both existing homes becoming available on the marketplace and also a shortage of lots to build on And in the same way that we talk about labor in agriculture construction and home builders had Have been dealing with a shortage of labor as well So there are a couple factors that are affecting the supply side of the housing market and With that You know, you could imagine well if I can't purchase a new home Or move into a new home. Maybe I'll just remodel what I have so remodels are up 7% and With a stronger demand and a little bit lower supply side. We're seeing the price Kind of continue to increase with these homes Just to touch on the overall economy for just a second There is the conference board leading economic index and This is where they'll take 10 economic indicators and combines it into one to create this Indicator so It's intended to reflect what might happen to the economy say in the next six or eight or so months and so if it was on a positive upward trend that would it's It Indicate like an expansion or growth period if it was on a a down tick That would indicate a Retraction or a session area type period So it's interesting because you can see there in about 2005 2006 it did Start on a downward trend and then we see Just a short time later Is when we experience the housing market and the great recession so There have been times where it turned down maybe to indicate a recession and That did not actually occur, but there is some Accuracy to this graph and and being able to predict certain things But as of now you can see it's been on a positive upward trend so indicating Economy has a positive outlook. I would encourage you with this graph and maybe the Two or three that we've looked at previously You know at the end of this month Maybe in the next month or two go back and look at those and see Did it flatten out? Did it? Stay on the same upward trend or What was there a downturn? so just kind of being aware and continually being aware of What those things are indicating? some data that we Can find Is the personal consumption expenditure data for flower seeds and potted plants So just like we talked about What happened with the Great Recession we can see that effect here Where it it fell off in 2008 and 2009 it took it a couple years to recover But it has since that time And we don't have all the data But it does look like as far as 2017 That was the highest levels that it's ever been at about 34 billion dollars so Obviously, that's good people are Willing and are purchasing these products and it has made a strong recovery since that time But again, we think about the the economy is doing well People have a little bit more income Probably going to make these purchases and then the performance of the nurturing garden stores within the US so The Dotted blue line is the revenue of these businesses and then the solid red line is the growth of these businesses revenue recovered since Great recession years has Hit pre-recession levels and maybe even exceeded those a little bit although we can see it's not It's maybe flattened out just a little bit recently In the same way with the growth since 2009 we've had positive growth at Sort of varying levels in the last year or so it's been One first less than 1% So there's some thought that there may be some Some changes with Within the green industry and there may be a couple things affecting that So baby boomers You know, I think each day so many thousand baby boomers are retiring and they're at a stage where They've maybe got more disposable income than they've ever had they Might be spending time traveling or want to spend time with their grandkids Maybe they've got a little bit older. Maybe have some health limitations. And so they say they're Maybe trending towards more services then going out and purchasing like I would write I'm at the stage where I would rather pay someone to come and take care of my lawn to come and take care of my plants Then me going out purchasing and doing it myself So there's some thought that there's more of a shift to the service industry Another thing would be The online retail and of course you think about the Walmarts and the Amazons going more and more in that realm and Maybe see less and less people visiting brick-and-mortar stores and that you know What kind of role does that play for our nursery and garden? businesses so positive Overall the economy has been good. I think we kind of know that We've had a stronger housing market. You might like to see the supply side just a little bit stronger Obviously it's good indicator that people are purchasing the green products Like we said maybe have that disposable income and they're going out and wanting to buy these things and then train trends like urban green spaces, so a Couple of examples would be like New York City with their high line. I think in Atlanta it's the belt line but Areas where they've incorporated green products like into these communities and into these areas for the benefit of You know they say we want a nice area where our employees or our residents can go spend some time And not just if you go downtown. It's going to be all concrete and all buildings, but we want to have Some nice areas where people can enjoy like flowers and plants in a nicely landscaped area so The more and more of those things gain traction obviously that would be a positive thing for this industry So just like we talked about positives with want to point out maybe some some potential obstacles as well So Up until just recently Fuel had been increasing although that's kind of slowed and had maybe even Become cheaper recently But the fuel was contributing a little bit to the additional freight costs but with freight and they're also having a Electronic logging mandate that they're having to comply with and I think that's adding some additional costs as well as Again we talk about labor with freight I Think they say you know there's a shortage of about a hundred thousand truck drivers now and that's also contributing to some additional costs So a lot of these products there things that aren't exactly local They're gonna have to travel say a little bit at least maybe within the state if not within a region or nationally and then We do talk about labor quite a bit in agriculture and in the same way it affects our green industry both on the production side, but then also on the services side and something I learned in Developing this presentation was that our H2B program 50% of the H2B visas allocated each year are used by the landscape industry However, that only contributes 5% of our landscape industry employment. So Know there's been talk of expanding that program or streamlining that program or making it a little bit easier to access and It seems like it's pretty heavily utilized already by this industry, but if Some changes were to take place. Maybe It would be used even more so By our green businesses and they would potentially stand to benefit from that but right now Maybe they feel like we still don't have the labor that we would like to and then natural disasters I Know with a number of our greenhouse and nursery businesses there in the lower half of the state and We think about that as an area that in the last couple years has dealt with some natural disaster type events and Obviously, that's not something that you could predict or plan or Prevent But something that obviously could affect those businesses and affect the industry On the flip side if they were in an area where they were less affected or could recover quickly Possibly they would stand to benefit in that they would be providing the products and the services that Communities and businesses and homes would want when they're going through say a rebuild so Just something again that you can't Really control it any sort of way, but obviously something that could have an effect on the industry There's an economics professor at Virginia Tech. Dr. David Cole that you know He likes to say that it's not the tough economic years that can get farms into financial difficulty but it's the good years and I think his meaning behind that is when things are going well, we might have a tendency to relax and feel like well Things are going good. We don't really have a lot to worry about right now And it may be at a time where we could Invest or expand our business, but we just encourage like smart and strategic investment And so say well things are going well You know, maybe we just hold a little bit of cash back into the business because we understand that In two or three years it may be that there is some kind of downturn in the economy and we want to Like pat our rainy day fund a little bit. So just being aware and in general If the business could respond to the what's happening say with the housing market what's happening with the overall economy Maybe the more resilient that business would be so just is there a plan like in the next six months if we continued on kind of a growth or expansion phase is there a plan for that or Vice versa if there was some kind of a downturn or recession in the economy does the business have a plan in place for that as well and Something in talking with dr. Charlie Hall he mentioned that a lot of times he'll Bring it up or encourage producers to think about is Focus on some of the functional benefits of what you're providing so you think about some things like We hear about pollinators and be health a lot recently and so When you're selling some of these products and services can you incorporate that and say hey when you use these things you're contributing to a pollinator friendly habitat or It's contributing to your natural resources and reducing erosion It contributes to people's Overall health and emotional well-being and things like that things to wear if there's a downturn in the economy They don't feel like well I'm just purchasing a pretty plant or pretty flower, but I'm actually getting some kind of benefit out of having these things Wanted to touch on this so we talked a lot in this presentation about labor and some of the issues with that so this is a It's it's a neat thing. It's a partnership between extension Auburn horticulture the Green Industry Training Center the Alabama Nursery and Landscape Association and the Alabama turfgrass Association, but if you think about some Job sites like indeed and LinkedIn that try to match up both employees and employers Like an employee can go post their information and employers can post potential job openings This website is along those lines, but specifically related to the green industry within Alabama So would encourage you to check that out if you have interest if you'd like more information Maybe contact the Alabama Green Industry Training Center John neighbors is there at the center he Colleague of extension I'm sure would be glad to talk to you and Would just encourage you to reach out there just wanted to acknowledge some of the Sources and the people that did provide information for this so dr. Hall. It takes the same in Advisor perspectives provided a couple graphs John at the Green Industry Training Center dr. Hake at University of Florida The economic survey that was done in Alabama and then a monthly report by Acre Research So thank you for your time and attention. We wish you a successful 2019 If you have any questions or comments about this presentation There's my contact information and as always extension is here to be a resource for growers and producers and want to Be a help in any way we can so thanks again and hope you have a successful year