It’s been a rough two years in the landscaping business, but the prospect of a growing economic recovery has Chattanooga-area lawn care business owners heaving a sign of relief.
“People have finally been willing to go ahead and schedule the landscaping that they’ve been thinking about for two or three years,” said Janet Phillips, owner of Landscape Arts Inc. “They’re ready to go, so they quit worrying about the economy.”
She lost 40 percent of her business in 2009 to customer penny-pinching, though she said she’s picking most of it back up this year.
A declining economy usually leads to consumers’ cutting back on luxury goods such as jewelry, expensive clothing, and contracted lawn care, said John Garrett, an economics professor at UTC. But the good news is that demand for such services could return as the economy improves over the next three years, he added.
“If people are economizing, lawn care is one of the first things they can economize on,” Garrett said. “Luxury goods and services should come back relatively steadily in line with the economy, but then again it’s a slow process.”
That’s not reassuring enough for lawn care professionals like James Swafford, owner of James Swafford Landscaping.
He said business has fallen off “40 to 50 percent” since the recession hit, though he’s “starting to see some signs of it coming back better than it was a year ago.”
With the combination of July heat and consumer tight-fistedness, “it’s probably been one of the worst summers for landscaping,” he said.
To be sure, it hasn’t been all bad. Competitors that Swafford calls “fly-by-night operators” have gone out of business, leaving established companies such as his own, which he runs with his 72-year-old father, to pick up their customers.
Unfortunately, the overall drop in customer numbers was so severe that the remaining lawn service companies have had to cut profit margins to compete for each grassy greenback, he said.
“I think it’s harder to make a profit now because the volume of jobs is not out there,” he said. Furthermore, with the jobs that do exist, “people don’t want to pay any kind of money, they’re trying to get out as cheap as possible.”
Even wealthy affected
Signal Mountain Nursery’s owner, Mark Bonastia, said he first noticed a drop in business in early 2008.
“Business dropped by a third, and big jobs did slow down. ” he said.
While a drop off in middle-class customers was to be expected, it seemed unusual to him in that he lost his wealthy customers in equal proportion. Those with money usually are slower to edge down their spending, he said, but this time “it seemed like all demographics were affected.”
At CAD Landscape Design & Installation, owner Grant Parker said that “it’s pretty well flatlined with the upper-class clients that we work with,” while he has also seen a “major decline” in middle-class customers, adding up to a 30 percent drop in business.
But with what he sees as a stable local economy, he’s optimistic now with the onset of fall, a season that usually gets homeowners into the mood to beautify their yard for spring. It could mean a revenue uptick both for Parker and for his lawn care colleagues, he said.
“We should be turning around here soon,” Parker said.
housing recovery far off
Still, there won’t be a true recovery as long as the housing market is in tatters, Garrett said.
A full recovery “could take three years and quite possibly four years,” he predicted, “but not two years and not possibly one year.”
In the meantime, Matt Hines said business is already booming at Hines Designs Landscaping.
“I started the business in 2007, the middle of the worst drought we’ve ever had, and went from there into the middle of the worst recession we’ve ever had,” Hines said.
But founding a company in a time of falling demand for his service was actually a good thing, he said.
“I’ve only been in business for myself for 3 1/2 years, and I think that was a good thing going into the recession because I wasn’t as big of a company, I didn’t have all the overhead,” he said.
And the kicker? As others are searching for work, Hines said that he’s “turned down over $200,000 worth of work this year just not having the time and manpower to do it.”