Key Insights and Takeaways From Dr. Charlie Hall’s Economic Forecast

AmericanHort’s Monday morning State of the Industry Keynote presentation during Cultivate’25 featured the always popular economic update from Dr. Charlie Hall, AmericanHort’s Chief Economist. Hall’s presentation offered a glimpse at the green industry’s current financial health, and where we might be headed. Did you miss it? If you did, we have you covered. Here are just a few takeaways (and be sure to email Charlie, and he’ll gladly send you a copy of his in-depth PowerPoint).

• Grower top-line sales in 2025 (year to date) vs 2024 have been strong, with 78% of growers reporting higher sales (38% said sales were up 0% to 5%).
• When compared to 2019’s pre-pandemic market, the numbers are even better, with 98% of growers reporting higher sales, and 69% saying sales have been up more than 25%.
• In terms of grower net profits compared to 2024, 74% of growers say profits are up. And once again, comparisons to 2019 show higher numbers, with 81% of growers reporting higher profits.
• Grower units sold are more of a mixed bag, with an even split between more and less units sold (26% said units sold were up 0% to 5%, which was the highest-ranked breakdown).
• Looking at retail sales, independent garden centers (based on The Garden Center Group data) report a 0.5% decrease in customer counts between 2025 and 2024, and a 3% decrease from the three-year average.
• Box store data shows that pandemic-era growth has slowed, but the industry overall continues to grow (just at a slower pace). As with other figures, numbers compared to 2019 are still very favorable. As Hall noted, “Most new gardeners are sticking around.”
• Looking at current economic conditions, the GDP (gross domestic product) is mostly strong, and is forecast to remain strong. The numbers are a bit deceiving, however, given the hazy tariff outlook. Hall noted that imports have been increasing steadily, mainly due to buyers trying to get ahead of potential tariffs.
• Supply chain issues were a big part of the discussion. “We’re in a wait-and-see mode when it comes to the effects of tariffs,” Hall said. “Will tariffs bring revenues or not? The reality is that both can be true.”
• What about inflation? Hall noted that higher rates of imports reflect what is being sold at pre-tariff price levels. “As those inventories are drawn down, tariffs will start showing in inflation numbers.”
• At one point, Hall compared today’s tariff market to the tax cuts from 2017, which may have helped some in the short-term, but failed to generate revenue in the long term (and in fact added to the national debt).
• Looking ahead, Hall said the average tariff rate will likely be about 14%, with prices going up in some but not all categories. “This is why the feds are delaying any decisions on interest rates; they want to see what happens with tariffs when imports slow.”
• In terms of the index of prices paid by growers (which should be a key factor in every grower’s forecasting), Hall predicts a 3.1% increase in costs in 2025. And for 2026? Again, tariffs are the unknown, with Hall projecting a 5.2% increase in costs when factoring in an average tariff rate of 10%, and a considerably higher 9.4% increase with full tariffs included. Labor will once again be the highest cost, followed by growing materials, containers/plastics, and fertilizers.
• Looking ahead, what are Dr. Hall’s thoughts on a possible recession? “Most leading indicators, other than the Conference Board Leading Economic Index, say no,” Hall said. Based on this, he predicts a 20% to 40% chance of a recession.
• Hall offered three take-home messages: 1) There is a mixed performance across all sectors of the industry; 2) You must track customer analytics over time; and 3) Manage your working capital, and focus on your value proposition.