10 Insights From Charlie Hall’s Green Industry Economic Outlook

Charlie Hall
Charlie Hall

How is the short-term economic outlook for the green industry shaping up? That was the theme of the “Mid-Year Economic Outlook” webinar presented on Tuesday, Aug. 30, by Charlie Hall, an economist and Ellison Chair in International Floriculture at Texas A&M University.

“An election year always makes things interesting,” Hall noted in kicking off his presentation. “Usually the economy is at its most stable during an election year.”

This year might be a little different, however, as Hall notes in the first of these 10 highlights from the presentation.

1. What is the one word that best depicts the current situation? According to Hall, it’s “uncertainty,” thanks to the current leading presidential candidates. Because of this, Hall says many businesses are going status quo and holding back on investments, not just in the green industry but for others, as well.

However, the best strategy may be the opposite of this, says Hall.

“I see this as a time for opportunity,” Hall says. “If we wanted certainty, we’d live in a different country.”

2. Baby boomers are in the early stages of retiring over what will eventually be a 19-year time period, which equates to around 10,000 people retiring every day.

“They built our industry to where it is today,” Hall says. “Generation X is taking their place buying homes and adding landscapes, but there are fewer of them, so the size of our market is naturally decreasing.”

3. Just because the economy is moving along slowly doesn’t mean we are performing badly, Hall notes.

“We are still producing more goods and services today than we were prior to the recession, and the statistics show we are creating more jobs while unemployment numbers are dropping.”

4. So what does the rest of the year look like? Hall points to the Confidence Board’s Leading Economic Index, which is slightly increasing.

“The chances of a recession occurring in the near future are very low,” Hall says. “We’ve had some close calls such as Brexit, but the effects weren’t as bad as they could have been.”

Usually big events such as Brexit will cause a recessions, but Hall also says “we’ve never seen something happen out of our country to cause a recession.”

5. Housing trends are another important economic indicator to consider, and in this area, Hall says housing starts are indeed increasing, and many of them are single-family starts, which means more people are taking on mortgage debt.

“Of those people who are buying houses, we’re seeing a lot of remodeling activity,” Hall says. “The numbers for building equipment and gardening equipment are growing.”

6. What about the effect of fuel prices?

“We are driving fewer miles today than we were before the recession, even with gas prices dropping,” Hall says. “Millennials don’t have the same need or desire to drive as their parents did. Plus, with higher urban populations, more people are working from home.”

7. Going back to the election, Hall says one of the main areas of real influence for the presidential candidates is immigration.

“Immigration is especially significant because our overall population growth is slowing,” Hall says. He also notes that the strongest growth in the economy is likely to take place with comprehensive immigration reform. It’s simply a numbers game, as adding more people leads to more home buying.

However, Hall also notes that on a broader scale, the President only has limited power to influence things, while Congress has a big role, as well.

“Look at how long we’ve been debating immigration, with no results,” he says.

8. If you choose to make investments in your business this year, should these investments be in improving efficiencies, or expanding the business? This was a question raised by one audience member during the webinar.

“We’ve seen too many businesses grow without a good strategy, including knowing whether your profit margin is generating sales,” Hall says. “I would start by improving efficiency.”

9. How is the green industry doing this year so far in sales? Because of weather-related concerns, Hall says it depends on the region you’re in.

“The Southwest has been down, while the Northeast has been up.”

10. What about the potential effects of a minimum wage increase?

“We’ve seen that a higher minimum wage can impact the very people you are trying to help,” Hall says. “Businesses will buy less of a product if a price increases, and a minimum wage increase effect on labor reflects this.”

In California, for example, Hall says the slow increase will mean a higher tax on businesses, which will lead many companies to move more toward automation.

Topics: ,

Leave a Reply

More From Finance/Operations...
ASCFG-Gretel-and-Steve-Adams-Sunny-Meadow-Flower-Farm-feature

November 22, 2017

Growers Showing Renewed Interest in Specialty Cut Flowers

At the brink of its 30th anniversary, the Association of Specialty Cut Flower Growers is connecting a diverse and growing group of members dedicated to producing and marketing cut flowers.

Read More
Griffin Pennsylvania Expo

November 22, 2017

Griffin Sets Dates for 2018 Grower & Retailer Expos

The company will host two Expos next year — one each in Massachusetts and Pennsylvania — and each will be a two-day event.

Read More
Berger-Equipment

November 17, 2017

How You Can Help Berger in Donating to Hurricane Harvey Victims (While Learning More About Plant Production)

Between Nov. 23-27, Berger will donate $1 for every download of its free technical plant production guides to hurricane relief efforts.

Read More
Latest Stories

October 10, 2017

Sharpen Your Skills in Cost Management and Profitabilit…

The University of Florida is offering a new online course on costing and profitability. The course will take growers through the process of how to accurately evaluate cost of production, labor efficiency, pricing, and equipment investment decisions.

Read More
Willoway Nurseries Team

October 1, 2017

How Willoway Nurseries Gets Its Staff Engaged in The Co…

Willoway Nurseries in Avon, OH, is creating a culture with people who think, act, and feel like owners. Learn how its team is taking the business to the next level.

Read More

September 21, 2017

Horticulture Is All About Connections

The beauty of our industry is that we are more than willing to reach out and help those around us. What connections can you make today to help your business, and what can you offer to help another grower?

Read More
Worker taking cuttings at Vivero Internacional.

September 11, 2017

Vivero Internacional Elevates Clean Cuttings to New Hei…

One of the last independent cutting operations, this fast-growing company raises the standard for delivering clean, high-quality unrooted cuttings.

Read More
Selecta Sponsor bed at Raker trial gardens

September 5, 2017

C. Raker & Sons Acquired By Roberta’s Unique Garden…

Ownership will change hands in December, and Raker will supply young plants for the 2018 season. Beyond that, leadership of the two operations say they are excited to move forward with a partnership that will continue to supply the industry, and gardeners, with top-quality plants.

Read More

August 1, 2017

MPS Honors D.S. Cole Growers for 10 Years of Sustainabi…

At Cultivate’17, a ceremony to mark a 10-year milestone since D.S. Cole Growers became involved with More Profitable Sustainability (MPS), as the first U.S. grower to achieve MPS certification, took owner Doug Cole by surprise. Separate celebrations also recognized Metrolina Greenhouses and Dümmen Orange for achieving MPS certification.

Read More
Nexus greenhouse construction for Knox Cannabis Facility

July 27, 2017

Ornamental Growers Will Revolutionize Cannabis Industry…

Professional growers have much to offer the emerging cannabis market, according to the co-owner of Knox Medical, one of the licensed cannabis producers in Florida.

Read More
Ball ColorLink logo

July 11, 2017

Get Guidance on Running Your Business from Ball ColorLi…

Representatives from Ball ColorLink will be on-hand at Cultivate’17 to answer questions and present business-building tools and industry insights to growers.

Read More
Lean Consortium in Washington

July 10, 2017

Washington Growers Join New Horticulture Lean Consortiu…

The group of growers has committed to learning and applying the principles of Lean, a method for eliminating waste that results in more value to customers delivered at a lower cost, in a shorter time, with fewer defects and less human effort.

Read More

April 11, 2017

Jerry Halamuda of Color Spot Nurseries Retires

The co-founder of Color Spot Nurseries has retired, effective immediately, and has named a replacement.

Read More

March 21, 2017

How Greenhouse Vegetable Growers Can Prepare for a Prod…

The United Fresh Produce Association is holding a Recall Ready Workshop in April that is designed to help growers properly manage a recall, from liability to communications.

Read More

March 14, 2017

Expanded Customer Footprint, E-Commerce, Succession Key…

Costa Farms' acquisition of indoor foliage producer Delray Plants rocked the industry, but the story behind Delray Plants' sale is the same as for many growers struggling with succession planning. For Costa Farms, the strategic purchase expands its customer footprint and also fast tracks its foray into e-commerce.

Read More

March 10, 2017

Costa Farms Expands With Purchase of Indoor Houseplant …

Costa Farms annnounced March 10 that it has acquired Delray Plants, one of the leaders in the indoor houseplant industry. The two operations are committed to the same values, principles, and goals to grow the industry, and will fit well together to accomplish this, say Randy Gilde, CEO of Delray Plants, and Joche Smith, CEO of Costa Farms.

Read More
Ken and Deena Altman

March 7, 2017

Altman Plants in Escrow to Purchase EuroAmerican Propag…

Ken Altman, a co-owner of Altman Plants based in Vista, CA, has confirmed that the operation is currently in escrow to purchase EuroAmerican Propagators, the Bonsall, CA-based young plant and finished plant grower that filed Chapter 7 Bankruptcy on Jan. 23, 2017. Ken and Deena Altman are co-owners of Altman Plants and The Plug Connection, along with their son Matthew, who has recently bought into the family business. The 55 acres of land and all of the facilities on it, which were previously owned by Jerry Church, a partner in EuroAmerican Propagators, are part of the purchase agreement currently in escrow, Altman says. However, it would not be absorbed by Altman Plants, which in 2016 was number 3 on Greenhouse Grower’s Top 100 Growers list with more than 11 million square feet of environmentally controlled greenhouse production, 62 acres of shade production, and 400 acres of outdoor field production. Altman Plants’ property […]

Read More
EuroAmerican Propagators Greenhouses

February 14, 2017

Suppliers Comment on Plant Genetics’ Fate After EuroAme…

Since the operation’s bankruptcy filing on January 23, 2017, suppliers associated with EuroAmerican Propagators have updated Greenhouse Grower on what the operation’s bankruptcy means for them – and how it will impact grower customers.

Read More
Stephanie Whitehouse

January 17, 2017

Stephanie Whitehouse Takes Her Passion for Plants to Di…

Stephanie Whitehouse, who has spent the last seven years as the Sales and Marketing Director for Peace Tree Farm in Kintnersville, PA, recently joined Dickman Farms Greenhouse and Garden Center in Auburn, NY, as the company’s new Retail General Manager.

Read More
Laura Drotleff

December 6, 2016

Are You Driving Young Growers Away? [Opinion]

In a time when the industry is facing a critical shortage of both labor and skilled, educated growers, it's important that grower operations don't unwittingly turn candidates off to a career at their business or in the industry in general. Take a closer look at your hiring practices to ensure you are being inclusive and not breaking any laws.

Read More
Trays move on an overhead conveyor to the end of the production line, where workers carefully pack the cleaned, sized, graded, counted and sorted Calla tubers

November 29, 2016

Texas Judge Halts Overtime Rule; Here’s What It Means F…

According to Craig Regelbrugge at AmericanHort, the injunction against the overtime rule is welcome news for horticulture.

Read More