Landscape contractors are expressing positive sentiments about growing revenues and purchasing equipment through the remainder of 2017 and into early 2018, according to Seaport Global Securities’ most recent quarterly survey of landscape contractors.
“We view the results as a positive for companies we cover that serve the landscaping and lawn & garden industry,” says Michael Shlisky, SGS analyst who conducted the study. “To a lesser extent, our survey is also positive for companies we cover with turf care businesses.”
“Overall, we believe our survey underscores the improving financial position at many landscapers, as well as the potential for further growth in equipment sales to this industry next year,” Shlisky says.
A summary of the survey results indicates:
• Purchasing Intentions: Approximately 32% of the respondents plan an increase in equipment purchases in late 2017 and early 2018, while just 8% intend to curtail their purchases.
• 2017 Revenue Outlook: 36% of survey respondents expect to see revenue growth of 10% or more in 2017. Approximately 24% expect to see revenue growth of 5-10% this year, while 16% expect growth of 2-5%.
• 2018 Revenue Outlook: First look at next year’s prospects is positive. Roughly 32% expect increases of 10% or more in 2018, with an additional 32% expecting an increase of 5-10% and another 32% expecting an increase of 2-5%. Just 4% expect a flat year or a decline in 2018. “We believe this is a favorable backdrop for power equipment purchases, at least to start the year,” says Shlisky.
• Improving Sentiments: Among the respondents to the survey, 56% said they feel better about the business today vs. 35% 3 months ago. The remaining 44% of respondents reported no change in sentiment.
Shlisky adds, “Much like our surveys in prior quarters, the two main drivers of equipment budgets over the next several months are business growth (56% of respondents cited this as a reason for capex) and regular replacement (48% cited this as a reason).”