Economic Impacts of the Green Industry in the United States

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Economic Impacts of the Green Industry in the United States

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Economic Impacts of the Green Industry in the United States Final Report to the National Urban and Community Forestry Advisory Committee by Charles R. Hall, PhD, University of Tennessee 2621 Morgan Circle Room 314B, Knoxville, TN 37996 [email protected] Alan W. Hodges, PhD, University of Florida PO Box 110240, Gainesville, FL 32611 [email protected] John J. Haydu, PhD, University of Florida 2725 Binion Rd, Apopka, FL 32703 [email protected] Revised June 3, 2005

Acknowledgements This research report was made possible by a grant from USDA-Forest Service, National Urban and Community Forestry Advisory Committee, along with funding from the American Nursery and Landscape Association (ANLA) and the Associated Landscape Contractors of America (formerly ALCA, now PLANET – the Professional Landcare Network). Others who contributed to the effort by providing information or technical reviews included John Brooker (University of Tennessee), David Mulkey and Tom Stevens (University of Florida), Jennifer Dennis (Purdue University), and members of the Green Industry Research Consortium (S-290 Multi-State Research Committee of USDA-CSREES).

Table of Contents List of Figures and Tables.......................................................................................................................... iv Glossary of Economic Impact Terms ........................................................................................................ vi Executive Summary .................................................................................................................................... 1 1. Background and Introduction ................................................................................................................. 5 Green Industry Structure...................................................................................................................... 6 Input Supply Firms ......................................................................................................................... 6 Production Firms............................................................................................................................. 6 Wholesale Distribution Firms ......................................................................................................... 8 Horticultural Service Firms............................................................................................................. 8 Retailers .......................................................................................................................................... 9 End Users ........................................................................................................................................ 9 Current Green Industry Situation....................................................................................................... 10 Nursery and Greenhouse Growers ................................................................................................ 10 U.S. Ornamental Imports .............................................................................................................. 12 Lawn and Garden Equipment ....................................................................................................... 13 Horticultural Service Firms........................................................................................................... 13 Green Industry Outlook ..................................................................................................................... 14 Consumer Trends .......................................................................................................................... 15 Producer Challenges ..................................................................................................................... 15 Structural Impacts on the Industry................................................................................................ 16 Previous Economic Impact Studies ................................................................................................... 17 2. Research Methodology ......................................................................................................................... 21 Industry Sector Classification............................................................................................................ 21 Information Sources........................................................................................................................... 21 Economic Impact Analysis ................................................................................................................ 23 3. Results for All Sectors .......................................................................................................................... 26 National Results................................................................................................................................. 26 State and Regional Results ................................................................................................................ 27 4. Results for Production and Manufacturing Sectors .............................................................................. 40 Nursery and Greenhouse Sector ........................................................................................................ 41 Lawn and Garden Equipment and Greenhouse Manufacturing Sectors............................................ 42 5. Results for the Horticultural Service Sectors........................................................................................ 46 ii

Landscape Services............................................................................................................................ 48 Landscape Architecture ..................................................................................................................... 48 6. Results for the Wholesale and Retail Trade Sectors............................................................................. 51 Wholesale Flower, Nursery Stock & Florist Supply ......................................................................... 52 Wholesale Lawn & Garden Equipment Distributors......................................................................... 52 Retail Lawn and Garden Supply Stores............................................................................................. 53 Retail Building Materials and Supply Stores..................................................................................... 53 Florists ............................................................................................................................................... 53 Retail Food and Beverage Stores....................................................................................................... 53 Retail General Merchandise Stores ................................................................................................... 54 7. Economic Impacts of Urban Forestry ................................................................................................... 62 Economic Impacts of Tree Sales and Tree Care Services ................................................................. 62 Other Economic Benefits of Urban Forestry ..................................................................................... 64 8. Literature and Information Sources Cited............................................................................................. 68 Appendix A--Economic Multipliers for the U.S. Green Industry Sectors................................................ 72

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List of Figures and Tables Table ES-1. Summary of Economic Impacts of the U.S. Green Industry by Sector, 2002 ........................ 2 Figure ES-1. Output Impacts of the U.S. Green Industry, by Region and Industry Group, 2002 .............. 2 Table ES-2. Economic Impacts of the U.S. Green Industry by Region/State and Industry Group, 2002 .. 3 Figure ES-2. Employment Impacts of the U.S. Green Industry, by Region and Industry Group, 2002 .... 4 Table 1-1. U.S. Households Purchasing Lawn and Garden Products, By Type of Outlet, 2003 ............... 9 Figure 1-1. Growth in Output of US Green Industry Sectors, 1987-2003................................................ 10 Table 1-2. Summary of Selected Recent Studies on Economic Impacts of the Green Industry in Individual States................................................................................................................................ 19 Table 1-3. State-Specific Studies of Economic Impacts of the Green Industry, 1978-2004 .................... 20 Table 2-1. Classification of Economic Sectors Associated with the Green Industry ............................... 21 Table 2-2. Sales and Employment in the U.S. Green Industry, 2002 ....................................................... 22 Table 2-3. Implan Sectors Used for Economic Impact Analysis of the Green Industry .......................... 24 Figure 2-1. Market Structure and Economic Linkages of the Green Industry.......................................... 24 Table 2-4. Output Total Effects Multipliers for the Green Industry, by Sector and State (2001) ............ 25 Table 3-1. Economic Impacts of the U.S. Green Industry, by Sector, 2002............................................. 26 Table 3-2. Economic Impacts of the U.S. Green Industry by State/Region and Industry Group, 2002... 27 Figure 3-1. Output Impacts of the U.S. Green Industry by Region and Industry Group, 2002................ 29 Figure 3-2. Employment Impacts of the U.S. Green Industry by Region and Industry Group, 2002 ...... 29 Figure 3-3. Value added Impacts of the U.S. Green Industry by Region and Industry Group, 2002....... 30 Table 3-3. Output Impacts of the U.S. Green Industry by Sector and State, 2002................................... 31 Figure 3-4. Output Impacts of the U.S. Green Industry by State and Industry Group, 2002 ................... 32 Table 3-4. Employment Impacts of the U.S. Green Industry by Sector and State, 2002 ......................... 33 Figure 3-5. Employment Impacts of the U.S. Green Industry by State and Industry Group, 2002.......... 34 Table 3-5. Value Added Impacts of the U.S. Green Industry by Sector and State, 2002......................... 35 Figure 3-6. Value Added Impacts of the U.S. Green Industry by State and Industry Group, 2002 ......... 36 Figure 3-7. Output Impacts of the U.S. Green Industry in Leading States, 2002..................................... 37 Figure 3-8. Employment Impacts of the U.S. Green Industry in Leading States, 2002 ........................... 37 Figure 3-9. Value Added Impacts of the U.S. Green Industry in Leading States, 2002........................... 38 Figure 3-10. Rank Order of States by Green Industry Share of Gross State Product, 2002..................... 38 Table 3-6. Green Industry Share of Gross State Product, 2002................................................................ 39 Table 4-1. Products Included in the Production and Manufacturing Sectors of the Green Industry........ 40 Table 4-2. Establishments, Employment, Payroll and Sales in Production and Manufacturing Sectors of the U.S. Green Industry, 2002 .......................................................................................................... 41 Table 4-3. Economic Impacts of the Production and Manufacturing Sectors of the U.S. Green Industry, 2002................................................................................................................................................... 41 Table 4-4. Economic Impacts of the U.S. Nursery and Greenhouse Sector by State, 2002..................... 43 iv

Table 4-5. Economic Impacts of the U.S. Lawn & Garden Equipment Manufacturing Sector by State, 2002................................................................................................................................................... 44 Table 4.6. Economic Impacts of the U.S. Greenhouse Manufacturing Sector by State, 2002 ................. 45 Table 5-1. Specialties for Horticultural Service Firms ............................................................................. 46 Table 5-2. Sales and Employment in the U.S. Horticultural Services Sectors, 2002 ............................... 47 Table 5-3. Economic Impacts of the U.S. Horticultural Services Sectors, 2002...................................... 48 Table 5-4. Economic Impacts of the U.S. Landscaping Services Sector by State, 2002.......................... 49 Table 5-5. Economic Impacts of the U.S. Landscape Architecture Sector by State, 2002....................... 50 Table 6-1. Output, Employment and Payroll in the U.S. Environmental Horticulture Wholesale and Retail Trade Sectors, 2002................................................................................................................ 51 Table 6-2. Economic Impacts of the U.S. Environmental Horticulture Wholesale and Retail Trade Sectors, 2002..................................................................................................................................... 52 Table 6-3. Economic Impacts of the U.S. Wholesale Flower, Nursery Stock & Florist Supply Sector by State, 2002......................................................................................................................................... 55 Table 6-4. Economic Impacts of the U.S. Wholesale Lawn & Garden Equipment Sector by State, 2002 ........................................................................................................................................................... 56 Table 6-5. Economic Impacts of the U.S. Retail Lawn and Garden Supply Stores Sector by State, 2002 ........................................................................................................................................................... 57 Table 6-6. Economic Impacts of the U.S. Retail Building Materials and Supply Stores Sector by State, 2002................................................................................................................................................... 58 Table 6-7. Economic Impacts of the U.S. Florists Sector by State, 2002................................................. 59 Table 6-8. Economic Impacts of the U.S. Retail Food and Beverage Stores Sector by State, 2002 ........ 60 Table 6-9. Economic Impacts of the U.S. Retail General Merchandise Stores Sector by State, 2002..... 61 Table 7-1. Economic Impacts of U.S. Urban Forestry Tree Sales and Tree Care Services, 2002 ........... 63 Appendix Table A-1. Multipliers for the Nursery and Greenhouse Sector .............................................. 72 Appendix Table A-2. Multipliers for the Lawn and Garden Equipment Manufacturing Sector.............. 73 Appendix Table A-3. Multipliers for the Landscaping Services Sector................................................... 74 Appendix Table A-4. Multipliers for the Landscape Architecture Sector................................................ 75 Appendix Table A-5. Multipliers for the Wholesale Flowers, Nursery Stock and Florist Supply, and Wholesale Equipment Distribution Sectors (Wholesale Trade) ....................................................... 76 Appendix Table A-6. Multipliers for the Lawn and Garden Store and Building Materials & Supplies Sectors............................................................................................................................................... 77 Appendix Table A-7. Multipliers for the Florist Sector (Miscellaneous Retail Stores) ........................... 78 Appendix Table A-8. Multipliers for the Food and Beverage Stores Sector............................................ 79 Appendix Table A-9. Multipliers for the General Merchandise Stores Sector......................................... 80 Appendix Figure A-1. Detailed Structure of the Green Industry in the United States ............................. 81

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Glossary of Economic Impact Terms Terms are presented in groups within a logical rather than alphabetical order Region defines the geographic area for which impacts are estimated. Regions are generally an aggregation of one or more counties. This analysis includes estimates for individual states of the U.S. Sector is a grouping of industries that produce similar products or services. Most economic reporting and models in the U.S. are based on the Standard Industrial Classification system (SIC code) or the North American Industrial Classification System (NAICS). Impact analysis estimates the impact of a change in output or employment resulting from a change in final demand to households, governments or exports. Input-output (I-O) model. An input-output model is a representation of the flows of economic activity between industry sectors within a region. The model captures what each business or sector must purchase from every other sector in order to produce its output of goods or services. Using such a model, flows of economic activity associated with any change in spending may be traced either forwards (e.g., spending generates employee wages which induces further spending) or backwards (e.g., purchases of plants that leads growers to purchase additional inputs -- fertilizers, containers, etc.). Multipliers for a region may be derived from an input-output model of the region's economy. IMPLAN is a micro-computer-based input output modeling system and Social Accounting Matrix (SAM). With IMPLAN, one can estimate I-O models of up to 528 sectors for any region consisting of one or more counties. IMPLAN includes procedures for generating multipliers and estimating impacts by applying final demand changes to the model. The current version of the software is IMPLAN Pro 2.0. Final Demand is the term for sales to final consumers (households or government). Sales between industries are termed intermediate sales. Economic impact analysis generally estimates the regional economic impacts of final demand changes. Direct effects are the changes in economic activity during the first round of spending. Secondary effects are the changes in economic activity from subsequent rounds of re-spending. There are two types of secondary effects: Indirect effects are the changes in sales, income or employment within the region in backward-linked industries supplying goods and services to businesses. For example, the increased sales in input supply firms resulting from more nursery industry sales is an indirect effect. Induced effects are the increased sales within the region from household spending of the income earned in the Green Industry and supporting industries. Employees in the Green Industry and supporting industries spend the income they earn on housing, utilities, groceries, and other consumer goods and services. This generates sales, income and employment throughout the region’s economy. Total effects are the sum of direct, indirect and induced effects. Multipliers capture the size of the secondary effects in a given region, generally as a ratio of the total change in economic activity in the region relative to the direct change. Multipliers may be expressed as ratios of sales, income or employment, or as ratios of total income or employment changes relative to direct sales. Multipliers express the degree of interdependency between sectors in a region’s economy and therefore vary considerably across regions and sectors. Type I multipliers include only direct and indirect effects. Type II multipliers also include induced effects. Type SAM multipliers used by IMPLAN additionally account for capital investments and transfer payments such as welfare and retirement income. A sector-specific multiplier gives the total changes to the economy associated with a unit change in output or employment in a given sector. Aggregate multipliers sum multiplier effects across many sectors with a single number. They are based on an assumed distribution of spending across these economic sectors, i.e., a weighted average of sector specific multipliers with the percentage of spending in each sector as the weighting factor.

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Purchaser prices are the prices paid by the final consumer of a good or service. Producer prices are the prices of goods at the factory or production point. For manufactured goods the purchaser price equals the producer price plus a retail margin, a wholesale margin, and a transportation margin. For services, the producer and purchaser prices are equivalent. Margins. The retail, wholesale and transportation margins are the portions of the purchaser price accruing to the retailer, wholesaler, and grower, respectively. Only the retail margins of many goods purchased by consumers accrue to the local region, as the wholesaler, shipper, and manufacturer often lie outside the local area. Measures of economic activity. Sales or output is the dollar volume of a good or service produced or sold. Final Demand is sales to final consumers, including households, governments, and exports. Intermediate sales are sales to other industrial sectors. Income is the money earned within the region from production and sales. Total income includes personal income (wage and salary income, including income of sole proprietor’s profits and rents). Jobs or employment is a measure of the number of jobs required to produce a given volume of sales/production, usually expressed as full time equivalents, or as the total number including part time and seasonal positions. Value Added is the sum of total income and indirect business taxes. Value added is the most commonly used measure of the contribution of a region to the national economy, as it avoids double counting of intermediate sales and captures only the “value added” by the region to final products.

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Executive Summary The environmental horticulture industry, also known as the “Green Industry”, is comprised of a variety of businesses involved in production, distribution and services associated with ornamental plants, landscape and garden supplies and equipment. Segments of the industry include wholesale nursery, greenhouse and sod growers, landscape architects, contractors and maintenance firms, retail garden centers, home centers and mass merchandisers with lawn and garden departments, and marketing intermediaries such as brokers, horticultural distribution centers, and re-wholesalers. In addition to these commercial sectors, many state and local governments have significant urban forestry operations for management of parks, botanic gardens, and right-ofways that are an integral segment of community infrastructure. The Green Industry is linked to urban forestry by providing quality plant material and professional personnel with specialized expertise for growing, maintaining, and managing city trees. Environmental horticulture is one of the fastest growing segments of the nation’s agricultural economy, often experiencing growth and expansion even during recessionary periods. The nursery and greenhouse sector has experienced considerable growth in the last two decades, albeit slowing somewhat in recent years. The landscape design, construction, and maintenance sector has also expanded due to strong economic conditions and robust building activity. Retail sales of horticultural goods have increased for both independent and chain-store type retailers, with considerable consolidation occurring due to the increased presence of home centers and mass merchants in the lawn and garden marketplace. The outlook for the Green Industry is promising, yet there are several challenges that will increase competitive pressures. In view of its importance, numerous studies have been conducted to document the Green Industry’s economic impacts in individual states or regions, however, the present study represents the first attempt to evaluate it economic impacts for the entire United States, using data from previous studies together with secondary industry statistics. A specific objective of the study was to evaluate the role, value and economic impact of forest tree species (woody ornamental trees) in the urban forestry environment. Nationwide estimates of the economic impacts of the Green Industry were derived from a variety of information sources, including industry statistics from the U.S. Economic Census and Census of Agriculture (2002), County Business Patterns, and primary surveys by horticulture economics researchers. Economic impacts for each state were computed using the Implan Pro software to build regional input-output models to derive economic multipliers that estimate the indirect effects of industry purchases and induced effects of employee household spending, and also capture the effects of taxes and transfer payments. Economic impacts for the U.S. Green Industry in 2002 were estimated at $147.8 billion (Bn) in output, 1,964,339 jobs, $95.1 Bn in value added, $64.3 Bn in labor income, and $6.9 Bn in indirect business taxes, with these values expressed in 2004 dollars (Table ES-1). For the production and manufacturing sectors, including nurseries/greenhouses, lawn and garden equipment manufacturers, and greenhouse manufacturers, total output impacts were $34.6 Bn, employment impacts were 300,677 jobs, and value added impacts were $20.8 Bn. For the horticultural services sectors of landscape services and landscape architects, total output impacts were $57.8 Bn, employment impacts were 753,557 jobs, and value added impacts were $39.0 Bn. For the wholesale/retail trade sectors, total output impacts were $55.5 Bn, employment impacts were 910,104 jobs, and value added impacts were $35.3 Bn. The largest individual sectors in terms of employment and value added impacts were landscaping services (704,875 jobs, $35.6 Bn), lawn and garden stores (347,916 jobs, $14.8 Bn), nursery and greenhouses (261,408 jobs, $18.1 Bn), florists (200,451 jobs, $4.0 Bn), and building material supply stores (123,591 jobs, $6.5 Bn). Other sectors with large value added impacts were general merchandise stores ($4.0 Bn), landscape architects ($3.5 Bn), lawn and garden equipment manufacturers ($2.6 Bn), lawn and garden equipment wholesalers ($2.7 Bn), wholesale flower, nursery stock and florist supplies ($1.9 Bn), and food & beverage stores ($1.4 Bn). Economic impact results are reported by state and region, as summarized in Table ES-2, Figures ES-1 and ES-2. Total value added impacts were largest in the Midwest region ($19.2 Bn), followed by the Pacific region ($18.4 Bn), Northeast ($17.9 Bn), and Southeast ($13.5 Bn). The largest individual states in terms of value added

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impacts, all exceeding $3 billion, were California ($13.7 Bn), Florida ($7.1 Bn), Texas ($6.1 Bn), Illinois ($4.3 Bn), Pennsylvania ($3.7 Bn), New York ($3.5 Bn), and Ohio ($3.5 Bn).

Table ES-1. Summary of Economic Impacts of the U.S. Green Industry by Sector, 2002 Output ($Mn)*

Industry Group/Sector (NAICS)

Employment (jobs)

Value Added ($Mn)*

Labor Income ($Mn)*

Indirect Business Taxes ($Mn)*

Production & Manufacturing 34,578 300,677 20,796 11,037 Nursery & Greenhouse (1114) 26,053 261,408 18,076 9,612 Lawn & Garden Equipment Mfg (333112) 8,281 37,343 2,610 1,346 Greenhouse Mfg (332311) 244 1,927 110 78 Horticultural Services 57,774 753,557 39,013 30,269 Landscaping Services (56173) 52,971 704,875 35,564 27,719 Landscape Architecture (54132) 4,803 48,683 3,449 2,549 Wholesale & Retail Trade 55,475 910,104 35,275 23,044 Wholesale Flowers, Nursery Stock and 2,879 68,969 1,907 1,130 Florist Supplies (42293) Garden Equipment Wholesale (421820) 4,146 40,617 2,737 1,601 Lawn & Garden Stores (4442) 22,859 347,916 14,806 9,747 Building Material Supply Stores (4441) 9,982 123,591 6,491 4,258 Florists (4531) 7,195 200,451 3,977 2,725 Food & beverage stores (445) 2,263 35,117 1,385 944 General merchandise stores (452) 6,150 93,443 3,973 2,639 Total All Sectors 147,828 1,964,339 95,084 64,349 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, U.S. Department of Commerce)

Great Plains

784 647 129 7 1,387 1,312 74 4,701 440 657 1,810 789 401 156 448 6,872

Production & Manufacturing

Mountain Southcentral

Horticultural Services

Appalachian Southeast

Wholesale & Retail Trade

Northeast Pacific Midwest 0

2

4

6 8 10 Billion Dollars (2004)

12

14

16

Figure ES-1. Output Impacts of the U.S. Green Industry, by Region and Industry Group, 2002

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Table ES-2. Economic Impacts of the U.S. Green Industry by Region/State and Industry Group, 2002 Region or State

East Northeast Connecticut Delaware Maine Maryland Massachusetts New Hampshire New Jersey New York Pennsylvania Rhode Island Vermont Appalachian Kentucky North Carolina Tennessee Virginia West Virginia Central Midwest Illinois Indiana Iowa Michigan Minnesota Missouri Ohio Wisconsin Great Plains Kansas Nebraska North Dakota South Dakota South Southcentral Arkansas Louisiana New Mexico Oklahoma Texas Southeast Alabama Florida Georgia Mississippi South Carolina West Mountain Arizona Colorado

Output Impacts ($Mn)*

41,118 26,568 2,350 448 509 3,524 3,239 729 4,210 5,265 5,589 403 302 14,550 1,257 5,155 3,854 3,914 371 34,825 31,825 6,897 3,010 1,459 4,845 3,099 2,488 5,855 4,170 2,999 1,362 961 307 369 34,559 13,992 1,395 1,069 520 1,352 9,656 20,568 1,681 9,997 4,726 977 3,187 37,326 9,824 3,206 3,085

Employment Impacts (jobs)

540,496 336,027 27,026 6,359 7,825 46,725 37,553 10,153 52,929 62,113 75,829 5,289 4,225 204,469 21,649 67,472 50,812 56,905 7,631 439,955 397,099 75,110 41,714 20,820 58,745 37,696 37,690 79,841 45,483 42,855 19,316 13,383 4,500 5,657 498,420 209,935 16,680 19,617 8,739 24,603 140,295 288,486 26,804 147,795 62,493 14,236 37,157 485,467 132,982 43,882 37,630

Value Added Impacts ($Mn)* All Sectors

27,033 17,867 1,659 297 331 2,440 2,159 465 2,875 3,511 3,672 262 196 9,166 821 3,583 2,050 2,493 220 21,070 19,243 4,335 1,804 906 2,991 1,864 1,495 3,532 2,317 1,827 813 596 189 228 22,150 8,615 675 679 353 819 6,088 13,535 1,148 7,076 3,020 548 1,745 24,830 6,449 2,081 2,019

Production & Manufact.

5,494 2,986 375 44 39 478 122 63 436 437 924 41 25 2,508 112 1,387 689 308 13 3,142 2,994 430 229 62 564 237 134 607 731 147 93 32 9 13 6,301 1,974 195 100 72 247 1,360 4,327 353 2,463 644 120 747 5,859 954 506 178

Horticultural Services

11,749 8,250 787 148 166 1,230 1,225 208 1,459 1,363 1,430 156 78 3,500 245 1,261 648 1,249 96 7,958 7,494 1,972 745 216 1,221 616 470 1,556 697 463 274 141 21 28 8,194 3,039 166 173 137 212 2,351 5,155 434 2,747 1,213 122 638 11,112 3,185 1,013 1,083

Wholesale & Retail Trade

9,790 6,632 496 104 126 732 811 194 980 1,711 1,319 65 93 3,159 464 935 713 936 111 9,970 8,754 1,933 830 627 1,205 1,010 890 1,369 890 1,216 446 424 160 187 7,656 3,602 315 406 145 359 2,377 4,054 360 1,866 1,162 306 359 7,859 2,309 563 758

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Region or State

Output Impacts ($Mn)*

Employment Impacts (jobs)

Value Added Impacts ($Mn)* All Sectors

Production & Manufact.

Horticultural Services

Idaho 853 12,000 576 91 Montana 357 5,988 219 31 Nevada 1,248 17,324 844 13 Utah 901 13,577 600 130 Wyoming 174 2,581 109 4 Pacific 27,502 352,485 18,382 4,905 Alaska 159 2,110 104 10 California 20,362 253,977 13,656 3,165 Hawaii 745 11,166 531 200 Oregon 3,173 43,980 2,010 1,048 Washington 3,064 41,251 2,080 482 Total All Regions 147,828 1,964,339 95,084 20,796 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce)

Wholesale & Retail Trade

164 43 633 206 44 7,927 36 6,429 220 448 795 39,013

320 145 198 264 61 5,550 58 4,063 112 515 803 35,275

The economic impacts of the urban forestry sector within the Green Industry were evaluated in relation to (1) the production of trees suitable for urban forestry by nurseries, and (2) tree care services provided by the landscape services sector. Based on survey information, the value of tree production suitable for urban forestry, including deciduous, evergreen, fruit, and Christmas trees, was $4.63 Bn. This value represented 27.2 percent of total output by the nursery and greenhouse sector. The value of tree care services was $9.92 Bn, which represented 27.1 percent of the output of the landscaping services sector. The total output of tree production and care services was valued at $14.55 Bn, which translated into $21.02 Bn in total output impacts, 259,224 jobs, $14.12 Bn in value added, $9.93 Bn in labor income, and $516 Mn in indirect business tax impacts. Trees sold to municipalities for use in urban forest settings (e.g., parks and other recreational areas) also are associated with significant public sector employment. In addition to these economic impacts of commercial activity within the Green Industry, various studies have shown that urban forests have other non-monetary or non-market economic and environmental impacts, including energy savings for building heating and cooling, reduction of atmospheric carbon dioxide, improved air quality, reduction of stormwater runoff , and other aesthetic benefits. Well landscaped homes with appropriate tree canopy have a 7 to 11 percent premium in value compared to similar properties without such amenities.

Production & Manufacturing

Great Plains Mountain

Horticultural Services

Southcentral Appalachian

Wholesale & Retail Trade

Southeast Northeast Pacific Midwest 0

50

100 150 Thousand Jobs

200

250

Figure ES-2. Employment Impacts of the U.S. Green Industry, by Region and Industry Group, 2002 4

1. Background and Introduction The U.S. environmental horticulture industry, also known as the “Green Industry”, is comprised of wholesale nursery and sod growers, landscape architects, designers/builders, contractors and maintenance firms, retail garden centers, home centers and mass merchandisers with lawn and garden departments, and marketing intermediaries such as brokers and horticultural distribution centers (re-wholesalers). This industry is one of the fastest growing sectors in the nation’s agricultural economy; often experiencing growth and expansion even during recessionary periods. The relationship between urban/community forestry and the Green Industry has become more widely recognized as urban forestry has become more acknowledged as an integral segment of the infrastructure of our communities. However, this relationship is still vastly unappreciated in terms of the degree of synergy that the two segments share. Not only is the Green Industry crucial for the support of urban forestry in providing quality plant material used in our cities, it also offers professional personnel with specialized expertise for growing, maintaining, and managing city trees. These professionals have demonstrated their willingness to educate, volunteer, and mentor city employees in the cities and towns where they make their homes and own businesses. Conversely, urban forestry initiatives provide the Green Industry with a strong, dependable, and expanding market in which they can sell their goods and services. Cities can rely on growers to produce the size and species they require, and they can also depend on a professional cadre of landscape contractors and tree care providers to help maintain the resource that a healthy urban or community forest offers to its citizens. Both entities enjoy the benefits of this symbiotic relationship, and each would be diminished without the other. The importance of developing a mechanism by which this relationship can be measured, therefore, is crucial to understanding how to best plan for the future strengthening of each. In spite of the magnitude and recent growth and interest in the Green Industry, there is surprisingly little information that has been developed on the national level regarding the economic impact of the Green Industry. The USDA does conduct floriculture and nursery crop surveys to collect information at the grower level, but data are often incomplete for some states and grower cash receipts reported do not reflect the further economic impacts generated from this production activity. Census data, including the 10-year Census of Horticultural Specialties, are subject to the same limitations and have historically had other mitigating problems such as poor response rate that reflect poorly on the data’s accuracy. For firms downstream in the supply chain, such as landscapers, rewholesalers, and retailers, there are economic statistics and employment data maintained by each state’s Office of the Comptroller. However, misclassification errors and non-compliance on the part of industry participants have made some state data speculative at best. There is a transition to a new system (called the North American Industrial Classification System, or NAICS for short) currently underway that should provide more robust estimates in the future. However, to date, no one source of data has proven historically to be instrumental in capturing the total economic importance of the Green Industry. Recognizing the limitations of existing data sources and also the critical need for this type of economic impact data, several state nursery and landscape associations have sponsored and developed their own economic impact studies for their respective green industries. Such states have found these studies to be useful in communicating the importance of the Green Industry to state legislatures, and in combating proposed legislation that would have had severe negative impacts on urban or community forestry initiatives and the Green Industry (e.g., labor regulations, constraints on water usage, etc.). As useful as these state-specific studies have been, there have not been similar analyses conducted at the national level, which would provide similar benefits on a national scale. The objective of this study is to estimate the economic impacts of the Green Industry at the national level, synergistically utilizing the studies that have already been conducted by several states, and complementing those with data from other primary and secondary sources. In addition, this study seeks to evaluate the value and role of forest tree species (woody ornamental trees) as a product. The project is funded under the third category of the NUCFAC 2003 Challenge Cost-Share Grant program (Communicating the Value of Urban and Community Forestry) with the research priority of “measuring the national value of goods and services produced by the Green Industry.”

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Green Industry Structure The Green Industry complex includes input suppliers; production firms such as nursery, greenhouse, and sod growers; wholesales distribution firms, including importers, brokers, re-wholesalers, transporters; horticultural service firms providing landscape and urban forestry services such as design, installation, and maintenance; and retail operations, including independent garden centers, florists, home improvement centers, and mass merchandisers or other chain stores. The United States leads the world in the production and marketing of floriculture and nursery crops. INPUT SUPPLY FIRMS Input supply firms, often referred to as allied trade firms, are businesses that provide various inputs for ornamental plant production, landscape services, and retail sales. These inputs commonly include agrichemicals, fertilizers, containers, packaging, farm machinery, tools and equipment, propagative materials, and consulting services. These products originate from extractive and manufacturing industries such as mining, petroleum, and forestry. PRODUCTION FIRMS Participants engaged in producing Green Industry products include growers of floriculture crops, nursery crops, and turfgrass sod. Floriculture crops include bedding plants, potted flowering plants, foliage plants, cut cultivated greens, and cut flowers. As distinguished from nursery crops, floriculture crops are generally herbaceous. Bedding and garden plants consist of young flowering plants (annuals and perennials) and vegetable plants. They are grown in flats, trays, pots, or hanging baskets, usually inside a controlled greenhouse environment, and sold largely for gardens and landscaping. Potted flowering plants are largely sold in pots for indoor use. The major potted flowering plants are poinsettias, orchids, florist chrysanthemums, and finished florist azaleas. Foliage plants are also sold in pots and hanging baskets for indoor and patio use, including larger specimens for office, hotel, and restaurant interiors. Cut flowers are usually sold in bunches or as bouquets with cut foliage. The most popular cut flowers are roses, carnations, gladioli, and chrysanthemums. Leatherleaf ferns are the leading cut foliage. Combining cut flowers and cut greens in bouquets or other flower arrangements is a value-added retail option. The market outlets for floriculture crops are florists, garden centers, mass merchandisers, supermarkets, chain stores, discount stores, home improvement centers, hardware stores, landscape contractors, and re-wholesalers. Other retail outlets are farmers markets, flea markets, and street vendors. Since cut flowers are perishable and live floral crops are sensitive to variations in temperature, they usually require cool transportation and storage conditions that preserve and prolong their quality before final sale. The demand for floral crops, especially cut flowers, is highly seasonal. Sales are normally highest from February through May and in the fall. Sales of cut flowers peak during holidays such as Valentine's Day and Mother's Day. Poinsettia plants are sold mostly from Thanksgiving to Christmas. Cut flowers and foliage plants, however, are increasingly popular throughout the year as indoor home and workplace decorations. Nursery crops are woody perennial plants that are usually grown in containers or in-ground. The Census of Agriculture defines nursery crops as ornamental trees and shrubs, fruit and nut trees (for noncommercial use), vines, and ground covers. They are primarily used for landscaping, not for producing edible products on a commercial scale. Trees and shrubs are classified as deciduous or evergreen. Deciduous includes shade, flowering, ornamental, fruit, and nut trees and shrubs. Evergreens include broadleaf and coniferous trees, and Christmas trees. The location of nursery production is determined largely by soil, climate, availability of water, accessibility and distance to markets, and cost of land. Each plant species has a hardiness zone that sets the northern geographic latitude for in-ground growth. Trees and shrubs start out as "liners" (undeveloped, but rooted, trees and plants in pots or trays). As seedlings, they are typically protected from intense sunlight or severe weather by shade or temporary cover. The next step is transplantation into larger containers or the field for further growth. Sales can occur at any stage depending on the plants' commercial purpose.

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Growers plant bare-root material (“liners”) in rows in the field, either in the fall, giving the roots time to develop before the plant breaks dormancy, or in the spring. Broadleaf shrubs and trees (holly, oak, and magnolia, for example) are often purchased as small container-grown liners, which are more expensive than bare-root plants because fewer die after transplanting. Liner production requires 6-12 months for the roots to develop and the plant to reach the size needed for planting in the field. Bare-root material, the most economical nursery stock, is best planted in the early spring before growth begins. Since nursery crops are usually grown in the field or in containers often without covered protection, the choice of crops is based on an area's natural vegetative species or the crop's ability to tolerate local climatic conditions. Thus, sales of most nursery crops, except Christmas trees, are more local or regional than floriculture crops, which are less costly to ship to farther markets. While homeowners are the typical consumers of trees, shrubs, and woody ornamental plants, markets also include developers, public utilities, golf courses, resorts, commercial parks, malls, as well as government agencies in charge of public parks, street and highway vegetation, and forests. Like many floral crops, demand for nursery crops (except Christmas trees) tends to coincide with normal planting seasons in the spring and fall. Wholesale sales of nursery products are usually handled by salespersons who have established relations with large buyers. Marketing programs include numerous trade shows, advertising in trade publications, catalogs, and direct mail. Close planning with large buyers (referred to as partnering) is required to secure long-term markets and to ensure that the right product mix is produced; however, demand for different products can still vary substantially from year to year. Sales and many variable expenses (costs-of-goods-sold) are highly seasonal, with up to 50 percent of sales in the second quarter of a typical year. Cash flow is uneven throughout the year so cash management is important. Technical knowledge of plants and pests is important for nursery management, although many of the everyday tasks (cultural practices) are routine and do not require specialized labor. However, automation has proven to be difficult, aside from the widespread use of irrigation and fertilization systems. Greenhouse operations can be very sophisticated, with automatic irrigation and fertilization (sometimes referred to as fertigation), and air and lighting systems driven by a variety of sensors. Innovations demanded by big-box retailers (such as custom labeling, bar codes, scanners, and electronic data interchange between suppliers and buyers) are now used by many producers. In recent years, there has been considerable consolidation among large growers, largely in response to consolidation occurring at the retail level. The rise of large, nationwide plant retailers like home centers and mass merchandisers has created a marketing opportunity for large growers who can supply the large volumes these customers require. Some nursery firms have grown rapidly through acquisition during the past decade, largely to service these big customers. Geared to serve big customers by handling large volumes, large growers actively discourage small-volume buyers. The big-box retailers and large landscape installation companies are supplied mainly by large nurseries, while independent garden centers, retail nurseries, and smaller landscape firms may be supplied by both large and small growers. Proximity and high product quality are more important to these buyers than low price because the end consumer is most interested in quality and the breadth of retail selection. Keeping plants alive and healthy is a challenge for many consumers, and small retail operations often have more technically knowledgeable staff than mass retailers to assist customers with plant care advice. To even out the seasonal nature of demand throughout the year, many nurseries produce plants like Easter lilies and poinsettias that have demand at times other than late spring or fall. Large producers may also sell related products like soil, sod, and Christmas trees. Some growers may produce a range of soil mixtures made from peat moss, sand, bark, sawdust, lime, perlite, vermiculite, and other materials (including mulched product waste) to sell to other growers on a contract basis. Turfgrass sod farms are specialized nurseries that usually only produce a subset of turfgrass varieties that are hardy for their particular region. Once sod leaves the nursery/farm, it usually passes through one or more marketing channels and is eventually used for new residential or commercial developments, for re-landscaping existing developments, for sports turf facilities such as athletic fields and golf courses, or for commercial applications that include businesses, public and private schools, and roadside uses. The final customer for sod can be the homeowner, a golf course, or an elementary school. Each of them has different circumstances and, hence,

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different expectations. Thus, sod producers take these different needs into account. Although the customer generally decides the type of sod to purchase, the installer also plays an important role. Both the landscape contractor and sod installer often make the decision from whom to buy and may even recommend to the homeowner the type of sod to plant. Hence, although both the final consumer and the middleman are important, the latter is critical from the sod producers’ perspective. WHOLESALE DISTRIBUTION FIRMS Wholesale distributors are an integral part of the Green Industry supply chain. Intermediaries such as brokers and importers facilitate the transactions of domestic and international (importing/exporting) growers and retailers. Rewholesalers (often referred to as horticultural distribution centers, HDCs, or landscape distribution centers) are also market facilitators that offer regionally specific mixes of landscape products for immediate pickup or delivery to landscape professionals and have emerged throughout the United States in a variety of forms. There are self-contained HDCs and HDCs that serve as independent profit centers within vertically-integrated grower, landscape contracting, and retail garden center operations. Landscape distribution traces its development back to the produce dealers of the 1940s and 1950s. Following World War II, a sustained building boom fueled an increasing demand for products and services that landscape professionals, retail garden centers, and other horticultural businesses attempted to fulfill. At the same time, rising land values pushed the growers farther away from the spreading urban and suburban areas where the most demand existed. The resulting longer supply lines created difficulties in meeting the expanding needs of the horticulture industry. This spawned development of this new distribution network from the nursery grower to the horticultural customer. The long-distance distribution system infrastructure for plants is still being refined in many parts of the country. An efficient trucking system extends from Florida all along the East coast, featuring regular routes run by independent trucking companies. Some large producers have developed in-house, large-volume delivery systems to service big-box retailers. But cross-country shipments are still difficult because of the long time that plants are in trucks, lack of back haul opportunities, and the excessive handling that takes place for small orders. Air transportation is being used more frequently, but only for high-value plants (e.g., cut flowers). HORTICULTURAL SERVICE FIRMS Horticultural service firms include those firms that provide a plethora of design (architectural) services, installation (construction) services, and maintenance services. These firms serve a variety of clientele, including residential homeowners, commercial business properties, and municipalities. Some firms in the industry offer a combination of design, installation, and maintenance services (e.g., design-build firms) to appeal to a larger clientele base. However, other businesses gear their services towards specific markets. For instance, some specialize in seeding and fertilizing areas along newly constructed highways and installing or constructing erosion control devices. Such work is usually contracted from state departments of transportation or subcontracted from state highway contractors working on federally funded projects. Local governments also use these services. Landscape design or architectural establishments are primarily engaged in planning and designing the development of land areas for projects, such as parks and other recreational areas, airports, highways, hospitals, schools, land subdivisions, and commercial, industrial, and residential areas, by applying knowledge of land characteristics, location of buildings and structures, use of land areas, and design of landscape projects. Landscape contracting or installation establishments are primarily engaged in installing trees, shrubs, plants, lawns, or gardens, and the construction of walkways, retaining walls, decks, fences, ponds, and other similar (hardscape) structures. Specialized installation services such as irrigation systems, water features, night lighting, and Christmas decorations are becoming more prevalent. Landscape maintenance establishments include firms that provide services such as mowing, trimming, leaf or snow removal, tree removal or trimming, mulching, and other garden and lawncare services. Lawncare services are defined more narrowly as services devoted to lawn “treatments” as opposed to the other “maintenance” activities listed. The difference is that treatment primarily involves applying fertilizers and pesticides to lawns, with the goal being to maximize lawn appearance and health while minimizing effort on the part of the client. The prime selling points of these service firms are that they have the knowledge and expertise to diagnose problems and apply lawn chemicals properly, effectively, and safely; they have the proper equipment to do the job; and they provide the materials, thus eliminating the need for homeowners to store toxic chemicals on residential

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premises. Besides offering basic services, many lawncare firms also offer customized programs which often include lawn aeration, dethatching, resodding and/or overseeding, and integrated pest management. RETAILERS Retail firms are another point of contact with end consumers of horticultural products, such as independent garden centers, florists, home centers, mass merchants, and other chain stores. Garden centers are establishments primarily engaged in selling trees, shrubs, other plants, seeds, bulbs, mulches, soil conditioners, fertilizers, pesticides, garden tools, and other garden supplies to the general public. These establishments primarily sell products purchased from others, but may sell some plants which they grow themselves. Garden center consumer studies indicate customer loyalty and repeat business result from a convenient store location, plant quality, customer service, and plant selection. According to the latest National Gardening Survey, the number of households that purchased lawn and garden products at selected retail outlets in 2003 is outlined below:

Table 1-1. U.S. Households Purchasing Lawn and Garden Products, By Type of Outlet, 2003 Type of Retail Outlet Home Center Independent Garden Center Mass Merchandiser Hardware Store Supermarket/Drug Store Feed/Seed Store Mail Order/Internet

Number of Households (Millions)

Share of Households (%)

45 36 34 25 16 10 6

53 % 43 % 41 % 30 % 19 % 12 % 7%

END USERS Final consumers of Green Industry products and services are referred to as end users. While the vast majority of nursery and turfgrass products used by end users are purchased from Green Industry businesses, this is not the case for services. A significant amount of lawn and landscape services are performed by the end users themselves. However, these services are only for internal consumption; that is, end users do not maintain or care for any landscape plants or green space other than their own. The list of end users includes airports, cemeteries, churches, commercial general business areas, golf courses and driving ranges, homeowners, municipalities, private recreation areas, public roadways, schools and universities, and utilities. "Commercial areas" are comprised of restaurants, banks, credit unions, commercial building operators, shopping centers, real estate managers, apartment buildings, other dwelling operators, mobile home sites, hotels and motels, medical centers, nursing care centers, intermediate care facilities, general and specialty hospitals, residential care facilities, retirement communities, community centers, and adult and child day-care centers. City park districts, arboretums and zoos, city streets, and other urban public areas are maintained by municipalities. Public roadways encompass both state and county roadsides and highways. The National Gardening Association is a well known and widely recognized authority on the consumer lawn and garden market in the United States. Since 1973, NGA has worked with the Gallup Organization (and now with Harris Interactive, Inc.) to provide market research information for the lawn, garden, and nursery industries. Some highlights of the latest NGA survey include: • Eight out of ten U.S. households (78%), or 84 million households, participated in one or more types of do-it-yourself indoor and outdoor lawn and garden activities in 2003. That is about the same number seen in 2002, and one of the highest levels of participation seen in the past five years. • Consumers spent an average of $457 per household on their lawns and gardens in 2003. Over the past five years, annual spending has averaged $465. USDA/ERS reports average household expenditures in 2003 on nursery and floral plants alone at $140 per household. • Consumers spent a total of $38.4 billion on their lawns and gardens in 2003. That was about the same level of spending seen over last three years. Over the past five years, total lawn and garden sales have

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increased at a compound annual growth rate of 5 percent, from $30.2 billion in 1998 to $38.4 billion in 2003. The most important consumers of lawn and garden products last year were men; people age 45 and older; college graduates; households with no children at home; households in the Northeast, South, and West; married households; 2-person households; and households with annual incomes over $75,000.

Current Green Industry Situation Long term growth in output of the principal sectors of the US Green Industry is charted in constant dollar terms for the period 1987 to 2003 in Figure 1-2. Information on the landscape services and retail sectors was available only through 2001, due to the changeover to the NAICS system. It is evident that the sales output of the landscape services sector has grown dramatically, from around $15 Bn in 1987 to nearly $40 Bn in 2001, representing an average annual growth rate of 11.0 percent. The retail nurseries and garden stores sector also grew significantly, although at a lower level, from $3.7 to $6.2 Bn as gross margin on sales, averaging 5.0 percent annual growth. The nursery and greenhouse sector grew in real terms from $10.7 Bn to $14.7 Bn in 2003, or at a 2.4 percent average annual rate. The lawn and garden equipment manufacturing sector actually declined in value from $8.3 to $7.1 Bn between 1998 and 2003, a -2.7 percent annual rate. NURSERY AND GREENHOUSE GROWERS Although grower receipts from greenhouse and nursery crops are expected to be up by less than 1 percent in 2004, they still represent another year of an unbroken series of annual sales increases. Sales of floriculture crops are also projected to be up slightly following a small decline in 2003 (USDA, NASS). Among floriculture product groups, cut flowers, potted flowering plants, and cut cultivated greens experienced reduced sales in 2003, largely due to competition from imports, and sales are projected to be down again in 2004 even as most prices continue upward. Bedding and garden annual and perennial plants and propagative materials are the only floriculture crops whose sales are expected to be higher in 2004. Nursery crops are also forecasted to extend annual sales gains into 2004, in part because of still-robust new housing construction.

Billion Dollars (deflated 2004)

40

Landscape & Horticultural Services

35 30

Nursery & Greenhouse

25 20

Lawn & Garden Equipment Manufacturing

15 10 5

Retail Nurseries & Garden Stores

0 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03

Figure 1-1. Growth in Output of US Green Industry Sectors, 1987-2003.

Values expressed in constant 2004 dollars using GDP Implicit Price Deflator (USDOC). Data Sources: USDOC/BEA; USDA/ERS (nursery & greenhouse).

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An important reason that nursery crop sales remained healthy in 2003, compared with floriculture crops, is the lower share of imports in nursery crop consumption. Relentless competition from imported cut flowers from South America has reduced domestic growers’ U.S. market share to minority status. Per-household consumption of greenhouse and nursery crops of $139 in 2004 represents the second year of decline since its peak in 2002, matching the pattern of floriculture crops. Nevertheless, the ornamental crop sector will post total sales in excess of $15.3 billion in 2004, a value exceeded only by corn, soybeans, and vegetables among agricultural crops nationwide. Sales of floriculture crops were projected to grow to $5.1 billion in 2004, due largely to gains from bedding and garden plants which represent 48 percent of total floriculture sales. Sales of bedding and garden annuals and herbaceous perennials are forecast to increase 1 percent. This contrasts with declines in cut flowers, potted flowering and foliage plants, and cut cultivated greens as competing imports provide further incentives for growers to produce other higher value and specialty crops. However, outsourcing cuttings and seedling production to lower-cost growers in Central America and Mexico is one way that domestic producers are coping. Besides the top three producers of ornamental crops—California, Florida, and Texas—North Carolina and Oregon are close to reaching $1 billion in annual sales. Both of these States produce about $800 million worth of nursery and other greenhouse crops and only between $100 and $200 million of floriculture crops. Emerging competitors are Michigan and Ohio, which, by contrast, produced between $200 and $400 million of floriculture crops in 2003. These Midwestern States are leading producers of bedding and garden plants, both annuals and perennials, in large part due to increased greenhouse production. Michigan and Ohio are not far behind Texas in total greenhouse acreage. While Florida remains the predominant supplier of indoor foliage plants east of the Mississippi River, upcoming suppliers include North Carolina, Ohio, and Louisiana. Together with bedding and garden plants, nursery and other greenhouse crops are the only agricultural product groups expected to continue gains in per-U.S.-household sales. Their higher sales in 2004 more than offset the declines in the other groups. Including Christmas trees, greenhouse vegetables, vegetable transplants, and sod, sales of nursery and other greenhouse crops have continuously grown historically but have slowed in recent years in terms of per-U.S.-household sales at around $93 since 2002. Given that this sector accounts for two-thirds of total greenhouse and nursery crop receipts, it is largely responsible for keeping per-household sales of ornamentals and other greenhouse crops at about $139 in recent years. While the projected increase in floriculture growers’ sales in 2004 is modest, average annual sales per grower is expected to continue rising beyond $1 million. As grower sales expand, either total production area also expands or sales per acre increases. In 2003, total U.S. floriculture production area increased largely due to Texas adding 10 times more space of open field production. Despite growth in open field production, average covered production area per large grower rose 3 percent to 4 acres, up from 3.9 in 2002. After climbing in 2002, the number of growers with at least $100,000 in annual floriculture sales fell from 4,974 to 4,741 in 2003. The addition of significant open field production area by growers pushed total production acres to 57,507 acres in 2003, up from 52,235 in 2002. However, since total production acreage grew faster than floriculture sales, average sales per acre dropped 9 percent, from $91,000 to $83,000, in 2003. Floriculture sales per production acre are still highest in the Midwestern States at $126,000. Growers in Minnesota lead the region at almost $230,000 sales per acre. Nevertheless, the largest growers based on floral sales are in the West—average sales per grower in California now exceed $1.8 million. While Southern States trail the West at $1.1 million sales, average sales per grower in South Carolina tops the country at $2.5 million sales per grower, dwarfing California’s average. South Carolina is the biggest producer of herbaceous perennial plants, selling 12 percent of total U.S. production. After slipping in 2002, U.S. cut flower imports surged 13 percent to $611 million in 2003, and are expected to continue to grow in 2004 (USDA, NASS). As a result, sales of domestically produced U.S. cut flowers are forecast down 1 percent in 2004, but consumer prices for flowers and indoor plants are up 18 percent from 2003. Cut flower production in California, which accounts for 70 percent of U.S. production, is at best flat in 2004, even in view of higher prices. The projected decline in volume of domestic cut flowers sold in 2004 is cushioned to some extent by somewhat higher prices. Overall sales of $421 million in 2004 are down 1 percent from 2003. As a result, sales per U.S. household fell to $3.83, almost a whole dollar lower than in 1997. By contrast, cut flower imports per U.S. household are almost $6, matching 1998’s level. Cut flowers comprise half of total U.S.

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floriculture and nursery stock imports. The share of imported cut flowers in total U.S. cut flower supply was 56 percent as recently as 2002. It is anticipated to jump to 63 percent in 2004. The number of cut flower producers in the United States was at a record low of 548 in 2003, down from 618 in 2002, and is expected to dwindle further. Despite fewer producers, average cut flower sales per U.S. grower have been growing and now approach $780,000 as the size of operations has expanded. By rank order, the largest average sales of growers are of roses ($701,000); gladioli, gerbera daisies, lilies (all around $500 million); and tulips and chrysanthemums (both about $300 million). In average unit prices, the leaders are pompon mums at $1.32 per bunch, orchids at $0.70 per bloom, and lilies at $0.64 per stem. Sales of potted flowering plants are forecast at $820 million and foliage plants at $616 million in 2004, down slightly from $829 million and $623 million, respectively, in 2003 (USDA, NASS). Competition from fastgrowing imports, especially from Canada, and crop damage from hurricanes in Florida will dampen sales prospects of domestic growers. Imports of orchid plants are also rising from Taiwan, Thailand, the Netherlands, South Korea, and Canada. Nevertheless, domestic grower sales of potted flowering plants per U.S. household have held steady at between $7 and $8, and between $5 and $6 for foliage plants, over the past decade. Florida dominates the foliage plant market, capturing 64 percent of total U.S. value in 2003. Prices of potted flowering plants have risen 6 percent on average since 2000, reflecting healthy demand for high-value varieties such as florist roses, florist azaleas, and spring flowering bulbs. Even prices of poinsettias, which account for 30 percent of total receipts from potted flowering plants in 2003, were up in the last two years. Prices of potted orchids, however, appear to be in a downward trend since 2000. The quantity of potted orchids sold jumped from 9.7 million in 2000 to 15.6 million in 2003, indicating increasing supply. Although producers boosted domestic orchid production, imported orchid plants have grown 70 percent in volume since 2000, providing ample competition to local growers. Bedding and garden annuals dominate U.S. floriculture sales, comprising 36 percent of the $5.1 billion sales of floral crops in 2003 (UDA-NASS). Together with herbaceous perennial plants, the share is boosted to 48 percent. And since this sector posted a 1-percent sales gain in 2003, compared with declines in cut flowers, potted flowering plants, and cut cultivated greens, it was enough to push total floriculture receipts up. This growth is expected to repeat in 2004 as total bedding and garden receipts reach at least $2.424 billion, up $23 million from 2003. Sales of bedding and garden annuals are forecasted at $1.823 billion in 2004, continuing annual gains since 2000. Herbaceous perennial sales are also projected up, exceeding sales of foliage plants for the first time and becoming the second largest segment/product group in the industry. It is evident that growers are increasing production of annuals and perennials relative to other floriculture crops, more significantly in the Midwest and Northeast. Sales of annuals in flats were down in 2003 while potted annuals and hanging baskets registered gains. Although floriculture sales per U.S. household will continue to decline, albeit marginally, per household sales of bedding and garden plants are expected to remain at just over $22, unchanged since 2002. Prices of bedding and garden plants have been noticeably stable since 2000 as sales growth is matched by the pace of quantity produced. This price pattern is the effective average between weak prices of annuals and rising prices of perennials since 2001. For annuals, prices of potted plants and hanging baskets show a slight upward slope in contrast to downward prices of bedding and garden plants in flats. Increased production of bedding and garden annuals in the Midwest is supported by higher overall prices. But production of herbaceous perennials, except potted hardy/garden mums, is shifting heavily to Southern States, specifically South Carolina. U.S. ORNAMENTAL IMPORTS Expected prices for imported cut flowers are up 10 percent, due in part to the weaker U.S. dollar and higher fuel costs for transport (USDA-NASS). U.S.-grown cut flower prices are up 3 percent, due also in part to higher fuel and energy costs and damage to cut flower production by hurricanes in late summer. Import prices of cut flowers in 2004 are 15 percent higher than in 2000, after initially dropping 5 percent in 2002. Cut flower imports fell in 2001 and 2002 due to weak U.S. demand which was precipitated by the economic recession and stock market downturn. The share of imports in U.S. cut flower consumption is projected at a record 65 percent, up from 61 percent in 2003. In 1992, the import share was 20 points lower at 45 percent. The quantity of imported flowering and bedding plants, largely from Canada, are expected to be up 8 percent in 2004 based on strong shipments from January to July. However, lower prices for imported flowering, bedding, and foliage plants push the import value down somewhat from 2003. Ninety-four percent of U.S. imported cut flowers are from Colombia, Ecuador, the Netherlands, Mexico, Canada, and Costa Rica. Cut flower imports are dominated by roses at 35 percent of

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imports, chrysanthemums at 11 percent, and carnations at 10 percent. Imports of flowering plants from Asia, such as orchids, and nursery plants and trees from Canada limit wholesale prices that domestic growers of these products can charge without losing market share. These help explain in part why wholesale prices of U.S.-grown potted flowering plants and bedding and garden plants have been generally flat since 2000. But for growers in the Midwestern and Eastern States, prices have improved relative to some growers in the South and especially in contrast to growers in the West. LAWN AND GARDEN EQUIPMENT U.S. demand for power lawn and garden equipment is projected to rise over 3 percent per year through 2009, reaching $10.7 billion, according to a new study by the Freedonia Group. An expansion of the key 55-64 year-old age group will contribute to gains, the report says, as this group typically trades up from older, less expensive equipment to higher-end products, or increasingly engages professional lawn care services. Growth will also result from product innovations and upgrades, driven by consumer demand for equipment with increased horsepower, additional features and lighter weight. The continued popularity of golf will also present opportunities, as a growing number of golf courses compete to have the best playing surfaces. The residential market dominates power lawn and garden equipment sales, representing approximately two-thirds of the total in 2004. However, advances in the commercial market have outpaced the residential market in recent years, bolstered by the tremendous growth in the sales of zero-turn radius turf mowers. In addition, the continuing rise in the number of professional landscapers (in part a byproduct of an aging population) has boosted commercial demand. Although gas-powered equipment will remain dominant, electric-powered products are expected to post significantly stronger gains through 2009. Battery-powered equipment will fare particularly well, as improved battery technology is introduced. Cordless products are easy to use and have a better environmental image than competitive products. In addition, they appeal to women, who account for a growing portion of equipment sales and use. Lawnmowers will continue to be the largest product segment, benefiting from their wide use in both residential and commercial applications. Turf and grounds equipment is expected to post the best gains, because of continuing growth in the professional landscaping services industry and the rising number of golf courses. Despite the improving durability of original equipment, parts and accessories will outpace the industry average due to the rising amount of stock in use. HORTICULTURAL SERVICE FIRMS Landscape-related firms surveyed in August 2004 by Lawn & Landscape magazine said that 2004 business revenue is up an average of 17.4 percent, individual service sales have increased in all categories, and net profits are projected to rise. Contributing to the industry’s sound standing is an increase in consumer spending and a healthy housing market. Overall, 2004 represented encouraging economic times for the Green Industry. In contrast to previous annual surveys, contractors say their 2004/2005 concerns have shifted from matters such as finding adequate labor to cost-based concerns such as escalating health insurance and workers’ compensation rates, as well as increased fuel expenses. Many contractors are focusing on raising business efficiency to combat these costs. Landscape companies are younger today, with the average age being 13.6 years old in 2004 versus 17.7 years old in 1999. In fact, a greater percentage of contractors – 28 percent – have been in business less than five years, compared to 12 percent in 2000, 15 percent in 2001 and 17 percent in 2003. Landscape companies that have operated more than five years include 23 percent who have been in business five to nine years, 25 percent who have been in business 10 to 15 years, and 24 percent who have been in business more than 20 years. Despite the fact that these companies are younger, they are generating more revenue, on average, today at $732,353, compared to $694,300 in 2002. In terms of growth, the percentage of contractors who said their total gross sales revenue would increase in 2004 surpassed the percentage who felt this way in previous years. For instance, 84 percent of contractors said their 2004 revenue would increase compared to 57 percent in 2003 or 59 percent in 2002. In fact, going back to 1997, the percentage of contractors predicting growth for a single year has never been higher than in 2004. The next closest percentage of contractors foreseeing growth was 72 percent in 1998. Contractors predicted an increase of net 17.4 percent this year. This is up from last year’s 13 percent, but down when compared to the rates

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experienced five years ago. For instance, contractors averaged 24 percent growth in 1998 and 19 percent growth in 1999. Today’s typical landscape contractor offers a wider array of services than in the past. Historically, lawn maintenance has represented the greatest total revenue for landscape businesses. Almost 33 percent of contractors said construction generated their greatest total revenue in 2004. This was fairly consistent but slightly higher than in previous years. In 1997, 30 percent of contractors claimed construction generated more revenue and, in 1998, 27 percent said it was their top revenue source. In contrast, fewer contractors claim that chemical lawn care or arborist services generate a majority of their sales than in years past. This year, 10 percent of contractors said chemical lawn care was their most profitable service, while 11 and 14 percent of contractors reported this in 1997 and 1998, respectively. Only 2 percent of contractors said arborist services represented their greatest revenue source, compared to 8 percent in 1997 and 7 percent in 1998. Nearly half of landscape businesses – 49 percent – said they have become more diverse in the past two years, offering a greater number of services, while 16 percent said they have become more specialized. Thirty-five percent of contractors reported no change in their service structure. Considering the two primary services for a landscape business – lawn maintenance and construction – Lawn & Landscape broke down the research to find out what other services typical mowing and design/build companies offer. For instance, 59 percent of the companies who primarily mow also offer construction services, 24 percent also offer chemical lawn care, and 53 percent also offer arborist services. Among firms identifying themselves as primarily construction companies, 63 percent also offer lawn maintenance, 23 percent offer chemical lawn care services and 70.6 percent offer arborist services. In terms of 2004 service growth, all areas are experiencing growth. Lawn maintenance is up15 percent, construction is up 11 percent, chemical/fertilizer services are up 9 percent, irrigation is up 5 percent, snow and ice control services are up 3 percent, arbor services are up 2 percent, and nursery/retail services are up 1 percent.

Green Industry Outlook Green Industry participants are facing both challenges and opportunities in today’s marketplace. While plant breeders have provided new varieties at a dramatic pace in recent years, which has helped to keep the consumer interested in the industry’s products, the demands of retailers are probably having a greater influence in shaping the marketplace for all of those in the market channel, with the possible exception of the consumer. Indeed, retailers are competing for market share and, in their efforts, they are changing the picture of horticulture as seen by both the consumer to whom they sell and the producers from whom they buy. At the consumer level, the marketplace can best be viewed as divided between so-called “traditional retailers” and mass marketers. Traditional retailers or “independents” would include retail florists, who tend to focus on cut flowers and cut flower arrangements for special occasions, and garden centers, which, in addition to their traditional inventories of trees and shrubs and, in recent decades, bedding and garden plants, are increasingly carrying more and more potted flowering and foliage plants. On the mass market side of the ledger, supermarkets have become the primary vendors of everyday cut flowers for the home, as well as for potted flowering plants. Increasingly, supermarkets are being viewed as vendors of holiday flowers and plants purchased for gifts. Some supermarkets carry foliage plants quite regularly, and some, in selected markets, have started to sell bedding/garden plants seasonally. Another mass marketer type would be the discount store; these retailers tend to focus on bedding and garden plants in the spring and potted flowering plants for Easter and Christmas. Some also include foliage plants in their offerings. In cases where these retailers have added perishable groceries to their mix (e.g. Wal-Mart SuperCenters and Super Kmarts), they have also added cut flowers as part of the retail format. Target, which had been very involved seasonally in the bedding/garden plant market throughout the country, has reduced this involvement to Florida, California, and selected other southwestern states, where there is more of a year-round market and where they have built permanent garden centers alongside their stores. Nationally, Target maintains a small foliage plant display in most stores, and they carry blooming holiday plants for Easter and Christmas.

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The other dominant mass marketer type is the home improvement/hardware/home center, dominated by Home Depot and Lowe’s. These retailers focus on bedding and garden plants to accompany their lines of trees and shrubs and lawn and garden hard goods (garden tools, fertilizers and chemicals, lawn mowers, hoses, and sprinklers, etc.), but they also carry both potted flowering and foliage plants on a weekly basis in established garden departments. At Easter and Christmas, these retailers also display racks of lilies and poinsettias throughout their stores. CONSUMER TRENDS Consumers are very divided by the various retail opportunities for nursery and floricultural products. First, it must be noted that there are very few retailers that can carry a mix that is representative of all of the major industry segments (nursery crops, cut flowers, potted flowering plants, foliage plants, and bedding/garden plants). Hence, many consumers are forced to shop among several retailer types to see the full array of product opportunities. Second, retailers vary dramatically in the selection offered, as well as the qualities, quantities, and sizes in the products and services they provide. Hence, if consumers have particular needs in mind, they may be forced to shop around to find their ideal retail offering. Of course, pricing varies among the retailers, as well. Working on the side of many retailers is the overall lack of knowledge by the majority of consumers about the industry’s products. For mass marketers, the lack of knowledge by the average lawn and garden consumer makes retailing a generic selection of dominant varieties and colors quite acceptable, especially if the retailer is able to attract consumers through the lowest price. For the traditional retailer able to attract the flower or plant aficionado through better quality, wider selection, or better service, the niche opportunities provide their raison d’être. Yet, consumers increasingly report that if they know what they want and they are looking for the bread-and-butter staples, they can get a great deal by buying at mass marketers. PRODUCER CHALLENGES The evolving marketplace has certain challenges for the grower. In many instances, buyers for mass marketers have added what must be considered artificial conditions to the buying arrangements. Some buyers have added “pseudo grades and standards” to plants based on shelving heights or personal preferences, rather than based on generally accepted plant-to-pot ratios; sometimes these conditions are set only to allow the retailer to better exhibit various differences among groups of plants being sold at different price points. Premium versus promotional plants being sold side-by-side provides an example. Ironically, such conditions sometimes make it easier for the uninformed consumers to recognize differences for their dollars. However, growers are sometimes forced either to sell perfectly acceptable plants at discounts because their dimensions fail to measure up to a particular buyer’s prerequisites or to culturally curtail plant growth to keep plants within the standards. Growers also are forced to choose among production strategies depending on the desired market outlet. On the one hand, growers producing for mass marketers typically will grow large quantities of a limited number of products in highly automated operations. On the other hand, growers producing for independents typically will grow fewer numbers of a wider selection of products in much less-automated surroundings. Consolidation of retailers has also presented some not-so-obvious marketing challenges for growers. There are instances in the marketplace where buyers are placing real or suggested limits on producers about which competitors they can sell to or on how much of a producer’s output they are willing to buy. The restraint of trade issues notwithstanding, such actions limit producer options. Growers rightfully want to spread their eggs among as many baskets as possible, but options are dwindling as certain chains continue to consolidate and as financial realities force smaller chains and/or independents out of business. In many markets, the big box chains often come onto the scene opening huge numbers of stores in a relatively short time. While this is the nature of mass markets, these actions, which have forced smaller retailers from the scene, have also had the effect of forcing producers to scramble to maintain any market opportunities to which they can sell. Sometimes the chains enter a new market and bring established supply relationships with them from distant locations, rather than developing new relationships with local producers. With alternative local retailers pressured, local growers often find themselves challenged to find an inviting market channel. Conversely, as chains move from market to market, a number of buyers have asked growers to supply not only those stores that have been supplied in the past, but also additional stores being built or acquired. Due to

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production or servicing constraints, additional volume is often beyond the means of certain suppliers. For the sake of buying efficiency, chain buyers have sometimes changed suppliers to those willing to add production volumes. There have also been instances where a chain has changed the buyers or their responsibilities, forcing producers to again compete and establish relationships with the new buyers. One phenomenon affecting growers is the relatively new auction buying by a number of chains, particularly supermarkets. Perhaps caused by consolidation and/or centralization of buying functions, a number of chains have asked growers to participate in online reverse auctions to bid for their business (e.g., www.florabid.com). In such instances, purchases are made from growers willing to supply to a set of predetermined and written specifications, which are published online. Thus, superior quality is not encouraged nor rewarded, as the product is seldom seen by buyers. Instead, growers are forced to produce to the minimum standards to remain as competitive as possible. Another decision being considered by several chains is whether to move to a pay-by-scan transaction basis. Today, most chains pay for the product delivered. But several chains (e.g. Home Depot) are considering moving to paying only for the product scanned at checkout. This would force producers to absorb the entire shrinkage now assumed by retailers. It might also force growers to modify their product and/or service protocols to help assure getting paid for their efforts. More frequent deliveries of smaller quantities per delivery and the servicing of retail displays are two possible examples of changes growers will be forced to make. Cash flow considerations are another concern, as well as who pays the costs of employee and/or customer theft. This pay-by-scan change would benefit the retailer, who will be able to radically reduce inventory dollars from their books. Such a move would increase the retailer’s return on assets, something of particular importance to Wall Street, as market opportunities become more limited due to store saturation. STRUCTURAL IMPACTS ON THE INDUSTRY The impacts of the mass marketers on the nursery and floricultural industry are tremendous. To their credit, many would argue that the chains have exposed many more consumers to nursery and floral products. There is no doubt that this is true, as the presence of mass marketers has opened not only the consumers’ eyes to the industry’s products, but additional market opportunities for producers as well. This has forced independent retailers to become more savvy a marketing by looking for ways to increase customer service. Mass marketers have also facilitated the growth of offshore cut flower producers as major suppliers to the U.S. consumer. In recent years, offshore producers have also become providers of many of the cut flower bouquets now offered at retail stores. These bouquets were formerly assembled in the United States near the cities in which they were sold. Domestically, the impact of the mass marketing of nursery and floricultural crops has led to the increased formation of larger and larger producer operations. The capital requirements needed to afford the infrastructure required to move mass quantities of product in a confined marketing window exceed those that this industry has historically managed. Most firms have been able to generate the capital on their own, but the industry also has seen examples of investment brokers entering the industry to help finance some of these production operations. In many instances, chain buyers have limited the number of firms with whom they deal in any market area, as chains have come to realize certain efficiencies in merchandising products if fewer vendors are utilized. Chains have begun asking vendors to provide care for in-store displays, especially during the bedding/garden plant season, something that is easier to request if one firm handles all of the merchandise. Whether or not producers are rewarded for the additional expense of providing fully managed displays is debatable, but some growers report that the improved product care leads to additional turns (inventory turnover), which provide the needed results. There are also several instances of producers partnering with smaller firms in order to handle the volumes required to supply burgeoning chains. In one instance, there may be as many as 40 growers involved in crossdocking activities to satisfy one chain’s needs in a market area. Depending on the arrangements, this helps to spread the risk among several producers. Still, there are numerous examples of producers who supply 50 percent, 75 percent, or even 100 percent of their output to one chain; when asked about risk, these growers often respond with discussions about production efficiencies and questions about what they could do even if they wanted to change, noting that their competitors would love to steal the account.

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In contrast, the focus on mass marketers by large growers has created opportunities for smaller growers to develop niches serving independent retailers or to go into retailing themselves, selling directly to the consumer. In a recent survey of growers, it was found that the majority of several thousand producers surveyed did some retailing of their own, whether that was 1 percent or 100 percent of their production. Smaller growers appeared to sell higher percentages, on average, of their production at retail. Yet, some larger producers have also used their own retail sales as a tactic for diversification. In many instances, producers in the middle seemed to focus their production on selling to independent retailers, perhaps including a retail operation of their own. The other impact of mass marketers on the industry has been one of consolidation. In recent years, grower numbers have appeared to decline from year to year, or at best, remain stable. One could debate why the producer numbers are diminishing, but many would argue that the stresses of either supplying mass marketers or competing with them as an independent grower-retailer are taking their toll. The capitalization requirements, the reduced margins, the increased demands, the risk associated with fewer customer numbers, and the resulting consequences should that risk come to be realized have all created market pressures for larger producers. The struggle to remain competitive in a viable niche for smaller producers can be equally trying in markets being inundated by competing chains. There are already certain markets where independents can hardly be found.

Previous Economic Impact Studies In spite of the magnitude and recent growth of the Green Industry outlined above, there is surprisingly little information that has been developed at the national level regarding the economic impact of the Green Industry. The USDA does conduct floriculture and nursery crop surveys to collect information at the grower level, but these data are often incomplete for some states and the cash receipts reported for/by growers do not reflect the further economic impacts generated from this production activity. Census data, including the 10-year Census of Horticultural Specialties, is subject to the same limitations and has historically had other mitigating problems such as poor response rate, which reflects poorly on the data’s accuracy. For firms downstream in the supply chain, such as landscapers, re-wholesalers, and retailers, there is Standard Industrial Classification (SIC) data maintained by each state’s Office of the Comptroller, but misclassification errors and non-compliance on the part of industry participants have made some state’s data speculative at best. There is a new sectoring scheme called the North American Industrial Classification System, or NAICS for short, which should provide more robust estimates in the future. However, to date, no one source of data has proven to be adequate in capturing the total economic importance of the Green Industry. Recognizing the limitations of existing data sources and also the critical need for this type of economic impact data, several state nursery and landscape associations have sponsored and developed their own economic impact studies for their respective green industries. Such associations have found these studies to be useful in communicating the importance of the Green Industry to state legislatures, in gaining assistance and resources, and in combating proposed legislation that would have had negative impacts on urban or community forestry initiatives and the Green Industry. As useful as these state-specific studies have been, there have not been comparable analyses conducted at the national level that would provide similar benefits on that scale. Additionally, each of the researchers conducting state-level studies used different research methodologies in their respective analyses, which were completed in different time frames. Thus the cross-sectional and time-series comparability of such studies is quite limited. Nonetheless, this chapter attempts to summarize the findings of previous studies so that a common “point of departure” can be used as a benchmark from which to compare the results from this study which is national in scope. Table 1-2 presents an overview of previous economic impact studies that have been conducted [in the last five years] regarding the Green Industry in selected states. While there have been other studies conducted (mostly by the Agricultural Statistics Service in respective states) that estimate grower-level sales or cash receipts, this summary only presents those that provide subsequent post-farm gate economic impacts. There have been other economic impact studies conducted in some states regarding turfgrass-related economic impacts (Table 1-3), but the focus here is on the economic impacts of the entire Green Industry. In Table 1-2, the studies are listed by state in alphabetical order. Total Green Industry sales are presented, along with the total employment and payroll associated with Green Industry sectors. Some state studies also provided estimates of value added and taxes paid

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by Green Industry participants and those are listed where applicable. To gain a common basis on which to perform a comparison of the results from each state, total population during the year of the study is tabulated, along with each state’s Gross State Product (GSP). In concept, an industry’s GSP (or its value added) is equal to its gross output (sales or receipts and other operating income, and inventory change) minus its intermediate inputs (use of goods and services purchased from other U.S. industries or imported). Thus, the GSP accounts provide data by industry and state that are consistent with the Nation’s gross domestic product (GDP) by industry accounts. However, total GSP for the Nation differs from GDP in the national income and product accounts for three reasons. First, like the national estimates of GDP by industry, GSP is measured as the sum of the distributions by industry of the components of gross domestic income. Second, GSP excludes (and GDP by industry include) compensation of Federal civilian and military personnel stationed abroad and government consumption of fixed capital for military structures located abroad and for military equipment, except domestically located office equipment. Third, GSP and GDP often have different revision schedules. Table 1-2 also includes an estimate of the calculated share of each state’s GSP that the Green Industry represents; an unadjusted Green Industry sales (impact) per capita calculation; and an adjusted sales (impact) per capita estimate. This adjusted sales impact involves multiplying each unadjusted per capita estimate by the respective GDP implicit price inflator for each respective year to convert all per capita estimates to 2004 dollars. As shown in the table, economic impacts estimated in the selected studies ranged from $186 million in Massachusetts and Vermont to a high of $10.3 billion in California. Florida was a close second with $9.2 billion and Texas ranked third with just over $9 billion in economic impact. Even with this being a subset of 23 states (only impact studies that have been conducted over the last five years were included), total economic impacts amounted to almost $60 billion (not adjusted for inflation). Adjusted per capita economic impacts ranged from $223 per person in Maine, largely due to its small industry relative to its population, to a high of $618 per person in Florida. The value on a per capita basis averaged across all states was $380 per person. The number of jobs represented by Green Industry firms ranged from 5,400 jobs in Vermont to just over 168,900 jobs in California. Texas and Florida ranked second and third in terms of Green Industry-related employment with 222,000 and 187,859 jobs respectively. However, the reader is cautioned against making direct comparisons from state to state due to the differences in research methods utilized in each state. For example, the data collection procedures often differed dramatically in that some states used mail or telephone surveys to collect primary data, while others relied heavily on secondary data sources, and others used enumerators (often Agricultural Statistics Service personnel) to interview Green Industry participants directly to collect primary data. Another important difference is the number and type of sectors that were included in each respective study’s definition of the Green Industry (refer to the last column of Table 1-2). For example, some states included all end users such as households, golf courses, and sports complexes, while others did not. Last, the model used to determine economic multipliers differed between the studies. Many of the researchers used the IMPLAN® (input-output) economic impact modeling system to conduct their respective analysis, but not all. All of these factors again point to the dire need to conduct a study that is national in scope that uses a common methodology to collect industry data and calculate associated economic impacts. The next chapter will provide a detailed description of the methodology used in this study that was used to guarantee results that will be comparable across states.

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Table 1-2. Summary of Selected Recent Studies on Economic Impacts of the Green Industry in Individual States State

Year

Output Impact (million $)

Employment Impact (jobs)

Impact per Capita ($) a, b, c

Sectors Includedd

24,100 Arizona 1,200 $230 P, L 2002 168,867 California 10,337 $321 P, R 2001 45,000 Colorado 1,500 $347 P, L, G, F, BG, R 2002 41,000 Connecticut 949 $278 P, L, R 2003 187,859 Florida 9,164 $618 P, L, R, T 2000 12,911 Idaho 662 $566 P, L, F, A, R 1999 160,000 Illinois 3,950 $352 P, L, R 1999 56,686 Louisiana 2,215 $524 P, G, L, R, RHA 2001 10,000 Maine 286 $223 P, L, R 2003 14,800 Maryland 1,152 $235 P, L, R 2000 52,000 Massachusetts 1,860 $296 P, L, R 2003 28,200 Minnesota 2,110 $437 P, L, R 2002 15,736 Nevada 751 $361 P, RW, L, G 2002 12,100 New Hampshire 438 $347 P, L, R 2003 96,600 Ohio 3,950 $368 P, L, RW, R 2001 107,000 Pennsylvania 3,300 $291 P, L, R 2000 10,000 Rhode Island 329 $312 P, L, R 2003 24,710 South Carolina 1,380 $381 P, L, F, R 1999 73,000 Tennessee 2,782 $528 P, L, R 2000 222,000 Texas 9,760 $504 P, L, R 2000 15,000 Utah 800 $386 P, L, R 2000 5,400 Vermont 186 $307 P, L, R 2003 43,000 Wisconsin 2,706 $518 P, HH, PG, G 2002 1,425,969 Total 61,768 $380 Notes/Sources: a Population data: U.S. Census Bureau, State & County Quickfacts (quickfacts.census.gov/qfd/index.html). b Impact per capita equals total Green Industry output impact divided by Total Population. c Output impacts per capita were adjusted to 2004 dollars using GDP Implicit Price Deflator (US Commerce Dept.). d Sector codes = [P] Producer; [L] Landscape-related; [R] retail; [RW] Re-wholesale; [F] Florist; [G] Golf; [BG] Botanical gardens; [HH] Households; [A] Arborists; [T] Trade; [RHA] Related horticultural activities; [PG] Public government.

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Table 1-3. State-Specific Studies of Economic Impacts of the Green Industry, 1978-2004 Year Reported 2004 2004 2003 2003 2003 2002 2002 2002 2002 2002 2001 2001 2001 2001 2001 2001 2000 2000 2000 2000 2000 2000 2000 1999 1999 1999 1999 1998 1998 1997 1997 1997 1996 1996 1996 1996 1995 1995 1994 1994 1994 1994 1994 1994 1993 1993 1993 1990 1989 1989 1989 1989 1987 1986 1985 1984 1982 1978

State Wisconsin New England California New Jersey New York Nevada Colorado Michigan Arizona Georgia Iowa Idaho Ohio Louisiana Illinois Florida Kansas Texas Virginia Maryland Missouri Pennsylvania Minnesota South Carolina North Carolina Arizona Wisconsin Missouri New England Florida Oregon Louisiana Maryland Mississippi Washington Ohio New Mexico Louisiana Arizona Kansas North Carolina South Carolina South Carolina Kansas Colorado Texas Tennessee Michigan Ohio Kentucky Pennsylvania Michigan Oklahoma North Carolina New Jersey Rhode Island Virginia Oklahoma

Scope Green Industry Survey Environmental Horticulture Nursery Industry Turfgrass Industry Turfgrass Industry Green Industry Operations Green Industry Turfgrass Industry Green Industry Golf Course and Landscape Maintenance Turfgrass Industry Green Industry Green Industry Green Industry Green Industry Environmental Horticulture Industry Horticulture Industry Green Industry Turfgrass Industry Horticulture Industry Nursery Industry Green Industry Nursery and Landscape Industry Horticulture Industry Turfgrass Green Industry Turfgrass Industry Turfgrass Industry Environmental Horticulture Industry Environmental Horticultural Industry Nursery and Greenhouse Industry Nursery and Turfgrass Industry Turfgrass Industry Turfgrass Industry Nursery and Landscape Industry Nursery Industry Turfgrass Industry Green Industry Green Industry Turfgrass Industry Turfgrass Industry Golf Industry Ornamental Horticulture and Turfgrass Industry Horticulture Industry Green Industry Green Industry Nursery and Floriculture Industry Nursery and Landscape Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry Turfgrass Industry

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2. Research Methodology Industry Sector Classification The economic sectors associated with the environmental horticulture or “Green” Industry were identified, based on their primary product or service activity as described in the North American Industry Classification System (Office of the President, 1997) as indicated in Table 2-1. Production and manufacturing includes the sectors for nursery and greenhouse, lawn and garden equipment manufacturers, and greenhouse manufacturers (prefabricated metal buildings). The horticultural services sector includes landscaping and landscape architecture. Wholesale and retail trade of horticultural goods includes sectors for flower, nursery stock and florist supplies wholesalers, lawn and garden stores, and florists. In addition, building material and supplies dealers, food and beverage stores, general merchandise stores, and farm and garden equipment wholesalers all have significant sales of horticultural merchandise as port of their overall business.

Table 2-1. Classification of Economic Sectors Associated with the Green Industry NAICS Code 1114 Nursery & Greenhouse 333112 Lawn & Garden Equipment Mfg 332311 Greenhouse Manufacturing (Prefab. Metal Buildings)* 56173 Landscaping Services 54132 Landscape Architectural Services Flower, Nursery Stock And Florist Supplies Wholesalers 42493 4442 Lawn & Garden Equipment & Supplies Stores 4531 Florists 4441 Building Material & Supplies Dealers* 445 Food & Beverage Stores* 452 General Merchandise Stores* 421820 Farm & Garden Machinery & Equipment Wholesalers* * Merchandise or product line sales of horticultural goods represents a portion of overall business. Source: Executive Office of the President, Office of Management and Budget. North American Industry Classification System, United States, 1997. Industry Sector

Information Sources Economic information on the Green Industry in the United States was compiled from a variety of sources. For the nursery and greenhouse sector, national and state information on number of farms and value of sales were taken from the Census of Agriculture for 2002 (USDA, 2004). For the various services and trade sectors, information on number of establishments, employment, and sales (receipts) were taken from the 2002 Economic Census Industry Report Series for U.S. totals, while state-level information on number of firms, employment and payroll in 2002 were taken from County Business Patterns (US Census Bureau, 2004, 2005). For the sectors whose primary business is not in horticulture (such as general merchandise stores), employment and payroll were estimated in proportion to horticulture merchandise or product line sales as a share of total sales. Also, state-level information on number of firms, employment and payroll were adjusted to match the U.S. totals. The Census of Agriculture and Economic Census were considered to be the most reliable information sources available, since they have well-established statistical methodologies, with adjustment for small or non-responding firms, and provide published confidence parameters. For some states in which employment and wages were non-disclosed because of a small number of firms reporting, employment was estimated at the midpoint of the range indicated, and payroll was estimated at the national average annual wages per employee.

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According to Census Bureau data, the number of establishments, employment, payroll, and sales receipts for sectors of the Green Industry in the United States in 2002 are shown in Table 2-2. There were a total of 255,389 business establishments involved in the industry, including 56,233 nursery producers or manufacturers, 82,683 horticultural services firms, and 116,473 wholesale/retail trade firms. Total reported employment was 1.085 million employees, and total payroll was $46 billion (Bn), excluding the nursery and greenhouse sector. Total sales receipts in 2002 were $147.1 Bn, including $23 Bn for producers, $38.8 Bn for horticultural services, and $85.3 Bn for wholesale/retail trade.

Table 2-2. Sales and Employment in the U.S. Green Industry, 2002 Sector (NAICS code) Production/Manufacturing Nursery & Greenhouse (1114) Lawn & Garden Equipment Manufacturing (33311) Prefabricated metal buildings (332311) (Greenhouses)* Horticultural Services Landscaping Services (56173) Landscape Architectural Services (54132) Wholesale & Retail Trade Horticulture Products Flower, Nursery Stock and Florist Supplies Wholesalers (42493) Lawn & Garden Equipment & Supplies Stores (4442) Florists (4531) Building Material & Supplies Dealers (4441)* Food & Beverage Stores (445)* General Merchandise Stores (452)* Farm & Garden Equipment Wholesalers (42382)* Total All Sectors

Establishments

Paid Employees

56,233 56,070 145 18 82,683 76,458 6,225 116,473 4,816 21,065 22,753 18,623 22,465 22,710 4,041 255,389

173,403 150,543 22,201 659 551,641 514,962 36,679 510,512 60,010 171,149 113,929 60,450 19,222 56,651 29,102 1,235,557

Annual Payroll ($Mn) 26,896 4,459 681 21,756 12,839 11,509 1,330 10,676 1,580 3,769 1,489 1,608 330 955 945 50,410

Sales Receipts ($Mn) 23,000 16,362 6,517 121 38,804 35,235 3,569 85,305 10,022 30,953 6,597 13,201 3,090 9,898 11,541 147,109

* Payroll and employment estimated proportional to merchandise line sales of total sales. Sources: 2002 Economic Census, 2002 Census of Agriculture (USDA/NASS), 2001 Implan data for the US (nursery & greenhouse employment, payroll) Primary market research data regarding the structure and performance of the nursery industry were generated by the Fourth National Nursery Industry survey conducted by the S290 Multi-state Regional Research Committee, a group of agricultural economists and horticulturists from 24 land-grant institutions across the country (including the principal investigators of this project). A total of 44 states participated in this survey. It is through the S290 survey efforts conducted in early 2004 that detailed data regarding sales of urban forest tree species were collected. For the first time in the survey’s history, a standard methodology of obtaining a sample frame was used. The population lists for each state were assembled from the respective Department of Agriculture offices responsible for licensing nursery producers. A master file of all certified/licensed nursery operations was compiled at the University of Florida. Two states that had recently completed nursery surveys were excluded (AL and AZ) in addition to four other states that had extremely small nursery numbers (AK, KS, MD, and WI). The remaining 44 states resulted in a combined listing of 38,269 certified/licensed nursery operations. Based on considerations of budget and statistical reliability, a sample of 15,888 firms was selected for the survey, with sampling in each state based on its proportion of the overall nursery population. Where information was available on nursery production area, inventory or sales volume, sampling was stratified for three size classes: small (less than five acres), medium (5 to 19 acres), and large (20 or more acres). Sampling was weighted on larger firms, with 100 percent of the large nurseries, 60 percent of the medium nurseries, and 25 percent of the small nurseries. In several states, the nursery acreage values were not available, or not available for all certified or licensed operations, and in these states 40 percent of the identified firms were sampled. The final sample included 3,476 large nurseries, 3,778 in the medium category, 5,996 of the small firms, and 2,338 of unknown size. There were a total of 2,485 usable returned questionnaires returned, representing an overall response rate 15.9 percent. The number of respondents from individual states ranged from as few as 10 in Nevada to 476 in Florida.

22

Economic Impact Analysis To evaluate the broad regional economic impacts of the Green Industry in the United States, regional economic models were developed for each state using the Implan software system and associated state datasets (MIG, Inc., 2004). The Implan system includes over 500 distinct industry sectors. The sectors pertinent to the Green Industry are indicated in Table 2-3 and Figure 2-1. The information for these models was derived from the U.S. National Income and Product Accounts, together with regional economic data collected by the U.S. Department of Commerce, Bureau of Economic Analysis. Input-output models represent the structure of a regional economy in terms of transactions between industries, employees, households, and government institutions (Miller & Blair, 1985). The Implan data used for this analysis was based on fiscal year 2001. Economic multipliers derived from the models were used to estimate the total economic activity generated in each state by sales (or output) to final demand or exports. This includes the effects of intermediate purchases by industry firms from other economic sectors (indirect effects) and the effects of industry employee household consumer spending (induced effects), in addition to direct sales by industry firms. The regional Implan models were constructed as fully closed models, with all household, government, and capital accounts treated as endogenous, to derive Social Accounting Matrix (SAM) type multipliers, which represent transfer payments as well as earned income. Separate multipliers are provided for output (sales), employment, value added, labor income, and business taxes. The output total effects multipliers for each industry sector and state are shown in Table 2-4. The direct, indirect, and induced effects multipliers for output, value added and employment for each industry sector are shown in the Appendix Tables. The multipliers for output, value added, labor income, and indirect business taxes are expressed in units of dollars per dollar output, while the employment multiplier is expressed in jobs per million dollars output. The total output multipliers generally range from 1.8 to 2.8, meaning that for each dollar of sales to final demand, total output generated in the region (state) is $1.80 to $2.80. Differences in values of the multipliers reflect the structure of industry sectors and regional mix of supplier industries. The multipliers were applied to estimated industry sales or output in order to estimate total economic impacts. For the producer and service sectors, total economic impacts were estimated as: Ihij= Shi x [ Ahij + Ehi x ( Bhij + Chij)]; and for the wholesale trade sectors, impacts were estimated as: Ihij= Shi x Gi [ Ahij + Ehi x ( Bhij + Chij)]; and for the retail trade sectors, impacts were estimated as: Ihij = Shi x Gi [ Ahij + Bhij + Chij], where Ihij is total impact for measures (j) of output, employment, value added, labor income, or indirect business. taxes, in each sector (i), and state (h). Shi is industry sales in sector i and state h. Ehi is the proportion of industry sales exported or shipped outside the state, by sector i in state h. Ahij is the direct effects multiplier for measure j in sector i and state h. Bhij is the indirect effects multiplier for measure j in sector i and state h. Chij is the induced effects multiplier for measure j in sector i and state h. Gi is the gross margin on retail sales for sector i. The calculation for the producer, wholesale, and service sectors assumes that only the export portion of output is sold to final demand, and therefore is subject to the indirect and induced effects multipliers, while the remainder of in-state sales is subject to intermediate demand from other business sectors and to direct effects multipliers. Data on exports were taken from the Implan database for 2001 or 1999, except in the case of the nursery and greenhouse sector, where information for some states was taken from the 2003 National Nursery Survey. The calculation for retail and wholesale sectors assumed output is reduced to reflect only the gross margin on sales according to national averages: 20.1 percent for flower and nursery stock wholesalers, 24.7 percent for general merchandise stores, 26.5 percent for lawn and garden equipment wholesalers, 28.5 percent for food and beverage stores, 29.5 percent for lawn and garden stores, 29.5 percent for building materials and supply stores, 42.3 percent for florists (miscellaneous retailers) [Census Bureau, Annual Benchmark Reports for Retail Trade & Food

23

Services, and for Wholesale Trade]. All results were stated in 2004 dollars by adusting values using the Gross Domestic Product (GDP) Implicit Price Deflator (U.S. Department of Commerce).

Table 2-3. Implan Sectors Used for Economic Impact Analysis of the Green Industry Implan Sector Name (Number) Nursery & Greenhouse (6) Lawn & Garden Equipment Mfg (258) Prefabricated Metal Building & Component Mfg. (232) Services To Buildings And Dwellings (458) Architectural And Engineering Services (439) Wholesale Trade (390) Building Material And Garden Supply Stores (404) Miscellaneous Store Retailers (411) Food And Beverage Stores (405) General Merchandise Stores (410)

Nursery & Greenhouse Production

Resident Population Employee Households

Landscaping Services Sector

Plant Products

Commodity and Service Exports/Imports

Wholesale & Retail Trade

Lawn & Garden Equipment Manufacturers

Jobs: Labor/ Wages

Horticulture Industry Sector Covered Nursery & Greenhouse Lawn & Garden Equipment Mfg Greenhouse Manufacturing Landscaping Services Landscape Architectural Services Flower, Nursery Stock & Florist Supplies Wholesalers Farm & Garden Machinery & Equipment Wholesalers Lawn & Garden Equipment & Supplies Stores Building Material & Supplies Dealers Florists Food & Beverage Stores General Merchandise Stores

Rest of United States and World Economy

Green Industry

Personal & Business Taxes

Local & State Government

Consumer Household Spending (Induced Effects)

Purchased Inputs (Indirect Effects)

Input & Service Suppliers

Local Consumption & Intermediate Demand

Wholesale & Retail Distribution

Rest of Local Economy

Imports (Leakages) Goods & Services (Money Flows)

Figure 2-1. Market Structure and Economic Linkages of the Green Industry

24

Table 2-4. Output Total Effects Multipliers for the Green Industry, by Sector and State (2001) State

Lawn & Wholesale Lawn & Florists Food & General Garden Garden Nursery & Landscaping Landscape Trade (Hort. (Misc. beverage merchanGreenhouse Equipment Services Architecture Goods, Stores (Bldg. Retailers) stores dise stores Mfg Equip.) Mat./Supl)

Alabama 1.976 1.932 2.186 Alaska 1.877 0.000 1.991 Arizona 2.213 1.929 2.368 Arkansas 1.922 1.768 2.051 California 2.480 2.180 2.687 Colorado 2.434 2.222 2.613 Connecticut 2.011 0.000 2.289 Delaware 1.873 0.000 2.020 Florida 2.370 2.001 2.572 Georgia 2.258 2.157 2.547 Hawaii 2.303 0.000 2.419 Idaho 2.052 0.000 2.190 Illinois 2.387 2.435 2.627 Indiana 2.092 2.096 2.232 Iowa 1.955 1.903 2.116 Kansas 2.119 1.876 2.268 Kentucky 1.916 1.874 2.071 Louisiana 2.061 1.736 2.193 Maine 2.010 1.672 2.128 Maryland 2.393 2.128 2.603 Massachusetts 2.205 2.023 2.423 Michigan 2.140 2.060 2.305 Minnesota 2.317 2.091 2.552 Mississippi 1.908 1.822 2.063 Missouri 2.255 2.182 2.455 Montana 1.888 0.000 2.021 Nebraska 1.978 1.905 2.249 Nevada 2.156 0.000 2.193 New Hampshire 2.150 0.000 2.303 New Jersey 1.996 1.894 2.299 New Mexico 2.078 0.000 2.198 New York 1.979 2.053 2.207 North Carolina 2.095 2.034 2.348 North Dakota 1.768 1.587 1.960 Ohio 2.016 1.862 2.205 Oklahoma 2.276 1.985 2.387 Oregon 2.307 1.934 2.386 Pennsylvania 2.292 2.166 2.481 Rhode Island 1.884 0.000 2.024 South Carolina 1.986 1.871 2.164 South Dakota 1.870 1.798 2.090 Tennessee 2.289 2.089 2.409 Texas 2.490 2.142 2.593 Utah 2.424 2.201 2.595 Vermont 1.985 1.745 2.133 Virginia 2.213 1.929 2.423 Washington 2.161 1.796 2.306 West Virginia 1.921 0.000 1.939 Wisconsin 2.090 2.083 2.251 Wyoming 1.881 0.000 1.935 Source: Implan 50 state data package, 2001 (MIG, Inc. 2004)

2.104 2.017 2.390 1.997 2.666 2.635 2.258 1.976 2.548 2.530 2.388 2.147 2.643 2.187 2.066 2.218 2.021 2.184 2.098 2.629 2.430 2.269 2.545 1.985 2.411 2.041 2.242 2.201 2.247 2.262 2.194 2.238 2.268 1.934 2.185 2.304 2.318 2.479 1.991 2.088 2.065 2.337 2.534 2.560 2.109 2.405 2.251 1.878 2.223 1.931

2.166 1.997 2.438 2.051 2.722 2.714 2.318 2.025 2.603 2.580 2.392 2.164 2.690 2.261 2.133 2.286 2.018 2.226 2.136 2.622 2.453 2.322 2.605 2.049 2.495 2.013 2.315 2.192 2.301 2.321 2.255 2.276 2.325 1.957 2.156 2.357 2.321 2.493 1.998 2.134 2.128 2.387 2.588 2.618 2.159 2.463 2.231 1.853 2.274 1.942

2.157 2.024 2.436 2.063 2.711 2.703 2.318 2.040 2.600 2.580 2.412 2.175 2.693 2.275 2.122 2.292 2.037 2.220 2.122 2.623 2.453 2.343 2.607 2.043 2.505 2.016 2.299 2.215 2.305 2.318 2.241 2.276 2.318 1.959 2.217 2.361 2.340 2.509 2.007 2.134 2.110 2.384 2.551 2.621 2.159 2.481 2.254 1.870 2.278 1.940

2.143 2.030 2.483 2.065 2.790 2.768 2.414 2.033 2.661 2.646 2.401 2.200 2.782 2.298 2.113 2.309 2.048 2.228 2.067 2.634 2.527 2.405 2.688 2.018 2.588 1.952 2.303 2.237 2.327 2.419 2.247 2.378 2.319 1.942 2.287 2.362 2.438 2.601 1.964 2.109 2.053 2.414 2.600 2.654 2.165 2.523 2.309 1.853 2.312 1.934

2.156 2.026 2.456 2.069 2.743 2.725 2.361 2.041 2.636 2.618 2.411 2.191 2.736 2.291 2.122 2.305 2.046 2.228 2.105 2.633 2.495 2.376 2.645 2.036 2.544 1.997 2.306 2.225 2.319 2.368 2.246 2.334 2.320 1.952 2.254 2.369 2.382 2.550 1.992 2.126 2.082 2.403 2.576 2.640 2.167 2.503 2.279 1.869 2.298 1.939

2.156 2.019 2.433 2.062 2.712 2.700 2.321 2.037 2.597 2.582 2.410 2.176 2.696 2.274 2.119 2.291 2.039 2.215 2.117 2.622 2.456 2.345 2.607 2.039 2.507 2.014 2.295 2.216 2.303 2.320 2.235 2.278 2.317 1.957 2.220 2.362 2.341 2.512 2.005 2.130 2.105 2.384 2.548 2.621 2.158 2.480 2.259 1.872 2.278 1.936

25

3. Results for All Sectors National Results Economic impact estimates for each group and sector of the U.S. Green Industry are summarized in Table 3-1. Estimated impacts for all states were $147.8 billion (Bn) in output, 1,964,339 jobs, $95.1 Bn in value added, $64.3 Bn in labor income, and $6.9 Bn in indirect business taxes. Note that values for 2002 are stated in 2004 dollars. For the production and manufacturing sectors, including nurseries/greenhouses, lawn and garden equipment manufacturers, and greenhouse manufacturers, total output impacts were $34.6 Bn, employment impacts were 300,677 jobs, and value added impacts were $20.8 Bn. For the horticultural services sectors, including landscape services and landscape architects, total output impacts were $57.8 Bn, employment impacts were 753,557 jobs, and value added impacts were $39.0 Bn. For the wholesale/retail trade sectors, total output impacts were $55.5 Bn, employment impacts were 910,104 jobs, and value added impacts were $35.3 Bn. The largest individual sectors in terms of output impact were landscaping services ($53.0 Bn), nurseries and greenhouses ($26.1 Bn), retail lawn and garden stores ($22.9 Bn), building material supply stores ($10.0 Bn), lawn and garden equipment manufacturers ($8.3 Bn), and florists ($7.2 Bn). In terms of employment impacts, the largest individual sectors were landscaping services (704,875 jobs), lawn and garden stores (347,916 jobs), nurseries and greenhouses (261,408 jobs), florists (200,451 jobs), and building material supply stores (123,591 jobs). Value added impacts by sectors were as follows: landscaping services ($35.6 Bn); nurseries and greenhouses ($18.1 Bn); lawn & garden stores ($14.8 Bn); building material & supply stores ($6.5 Bn); general merchandise stores ($4.0 Bn); florists ($4.0 Bn); landscape architects ($3.4 Bn); lawn and garden equipment manufacturers ($2.6 Bn); lawn and garden equipment wholesalers ($2.7 Bn); wholesale flower, nursery stock, and florist supplies ($1.9 Bn); and food & beverage stores ($1.4 Bn).

Table 3-1. Economic Impacts of the U.S. Green Industry, by Sector, 2002 Industry Group/Sector (NAICS)

Output ($Mn)*

Employment (jobs)

Value Added ($Mn)*

Labor Income ($Mn)*

Production & Manufacturing 34,578 300,677 20,796 11,037 Nursery & Greenhouse (1114) 26,053 261,408 18,076 9,612 Lawn & Garden Equipment Mfg (333112) 8,281 37,343 2,610 1,346 Greenhouse Mfg (332311) 244 1,927 110 78 Horticultural Services 57,774 753,557 39,013 30,269 Landscaping Services (56173) 52,971 704,875 35,564 27,719 Landscape Architecture (54132) 4,803 48,683 3,449 2,549 Wholesale & Retail Trade 55,475 910,104 35,275 23,044 Wholesale Flowers, Nursery Stock and Florist Supplies (42293) 2,879 68,969 1,907 1,130 Garden Equipment Wholesale (421820) 4,146 40,617 2,737 1,601 Lawn & Garden Stores (4442) 22,859 347,916 14,806 9,747 Building Material Supply Stores (4441) 9,982 123,591 6,491 4,258 Florists (4531) 7,195 200,451 3,977 2,725 Food & beverage stores (445) 2,263 35,117 1,385 944 General merchandise stores (452) 6,150 93,443 3,973 2,639 Total All Sectors 147,828 1,964,339 95,084 64,349 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce)

Indirect Business Taxes ($Mn)* 784 647 129 7 1,387 1,312 74 4,701 440 657 1,810 789 401 156 448 6,872

26

State and Regional Results Total output, employment, and value added impacts are summarized by state and region for each sector in Table 3-2 and Figures 3-1, 3-2, and 3-3. Output, employment, and value added impacts are detailed by individual sectors and states in Figures 3-4, 3-5, and 3-6 and Tables 3-3, 3-4, and 3-5, respectively. Total value added impacts were largest in the Midwest region ($19.2 Bn), followed by the Pacific region ($18.4 Bn), Northeast ($17.9 Bn), and Southeast ($13.5 Bn). The largest individual states in terms of output impacts (Figure 3-7), all exceeding $4 billion, were California ($20.4 Bn), Florida ($9.9 Bn), Texas ($9.7 Bn), Illinois ($6.9 Bn), Ohio ($5.9 Bn), Pennsylvania ($5.6 Bn), New York ($5.3 Bn), North Carolina ($5.2 Bn), Michigan ($4.8 Bn), and Georgia ($4.2 Bn). The largest individual states in terms of employment (Figure 3-8), all exceeding 60,000 FTE employees, were California (253,977), Florida (147,795), Texas (140,295), Ohio (79,841), Pennsylvania (75,829), Illinois (75,110), North Carolina (67,472), Georgia (62,493), and New York (62,113). The largest individual states in terms of value added impacts (Figure 3-9), all exceeding $3 billion, were California ($13.7 Bn), Florida ($7.1 Bn), Texas ($6.1 Bn), Illinois ($4.3 Bn), Pennsylvania ($3.7 Bn), New York ($3.5 Bn) and Ohio ($3.5 Bn). Detailed results for the major industry group of production/manufacturing, horticultural services and wholesale/retail trade are given in chapters 4, 5, and 6, respectively. The Green Industry share of gross state product (GSP) by state is presented in Figure 3-10. GSP is the value added by the labor and property located in a state and is derived as the sum of the GSP originating in all industries in the state. In concept an industry's GSP, referred to as its "value added", is equivalent to its gross output (sales or receipts and other operating income, commodity taxes, and inventory change) minus its intermediate inputs (consumption of goods and services purchased from other U.S. industries or imported). Thus, GSP is often considered the state counterpart of the nation's GDP – one of the most featured measures of U.S. output. In practice, GSP estimates are measured as the sum of the distributions by industry and state of the components of gross domestic income -- that is, the sum of the costs incurred and incomes earned in the production of GDP. In the U.S., the total value added of the Green Industry ($95.1 Bn) represents slightly less than 1 percent of the GSP sum of all states ($10,830 Bn). The top five states with the highest relative percentage of state GSP (Figure 12) included Oregon (1.7%), Idaho (1.4%), South Carolina (1.4%), Florida (1.3%) and Wisconsin (1.2%).

Table 3-2. Economic Impacts of the U.S. Green Industry by State/Region and Industry Group, 2002 Output Impacts ($Mn)* Region/State

Employment Impacts (jobs)

All Sectors

Prod. & Manuf.

Hort. Service

Trade

East

41,118

8,543

17,282

Northeast Connecticut

26,568 2,350

4,283 453

11,993 1,143

Value Added Impacts ($Mn)*

All Sectors

Prod. & Manuf.

Hort. Service

Trade

All Sectors

Prod. & Manuf

Hort. Service

15,293

540,496

82,198

208,434

249,865

27,033

5,494

11,749

9,790

10,292 754

336,027 27,026

43,799 4,807

131,563 11,213

160,664 11,006

17,867 1,659

2,986 375

8,250 787

6,632 496

Trade

Delaware

448

53

228

166

6,359

375

3,194

2,789

297

44

148

104

Maine

509

56

253

201

7,825

665

3,252

3,908

331

39

166

126

Maryland

3,524

605

1,807

1,112

46,725

5,666

22,596

18,463

2,440

478

1,230

732

Massachusetts

3,239

199

1,787

1,252

37,553

3,411

16,549

17,593

2,159

122

1,225

811

729

104

316

309

10,153

1,470

3,584

5,099

465

63

208

194

New Jersey

4,210

580

2,128

1,502

52,929

7,042

23,219

22,668

2,875

436

1,459

980

New York

5,265

751

1,887

2,627

62,113

5,344

18,704

38,065

3,511

437

1,363

1,711

Pennsylvania

5,589

1,377

2,091

2,120

75,829

13,803

25,433

36,593

3,672

924

1,430

1,319

Rhode Island

403

67

233

103

5,289

895

2,474

1,920

262

41

156

65

302 14,550

37 4,260

119 5,289

146 5,001

4,225 204,469

322 38,398

1,344 76,871

2,559 89,200

196 9,166

25 2,508

78 3,500

93 3,159 464

New Hampshire

Vermont Appalachian Kentucky

1,257

138

373

746

21,649

1,941

5,644

14,065

821

112

245

North Carolina

5,155

1,756

1,925

1,473

67,472

12,992

29,072

25,408

3,583

1,387

1,261

935

Tennessee

3,854

1,741

975

1,138

50,812

16,603

13,793

20,416

2,050

689

648

713

Virginia

3,914

584

1,869

1,460

56,905

5,771

26,059

25,074

2,493

308

1,249

936

371

40

147

183

7,631

1,091

2,303

4,237

220

13

96

111

34,825

7,017

11,887

15,920

439,955

46,114

136,824

257,016

21,070

3,142

7,958

9,970

West Virginia

Central

27

Output Impacts ($Mn)* Region/State

Midwest Illinois

Employment Impacts (jobs)

All Sectors

Prod. & Manuf.

Hort. Service

Trade

31,825 6,897

6,663 958

11,179 2,876

13,984 3,063

Value Added Impacts ($Mn)*

All Sectors

Prod. & Manuf.

Hort. Service

Trade

All Sectors

Prod. & Manuf

Hort. Service

397,099 75,110

44,061 4,666

127,054 26,727

225,984 43,718

19,243 4,335

2,994 430

7,494 1,972

8,754 1,933 830

Trade

Indiana

3,010

522

1,140

1,348

41,714

3,407

14,632

23,676

1,804

229

745

Iowa

1,459

134

329

996

20,820

823

4,371

15,627

906

62

216

627

Michigan

4,845

1,122

1,796

1,927

58,745

9,269

18,110

31,365

2,991

564

1,221

1,205 1,010

Minnesota

3,099

557

932

1,610

37,696

3,152

10,080

24,465

1,864

237

616

Missouri

2,488

363

704

1,422

37,690

2,539

9,994

25,157

1,495

134

470

890

Ohio

5,855

1,303

2,354

2,198

79,841

10,077

31,493

38,271

3,532

607

1,556

1,369

Wisconsin

4,170

1,704

1,046

1,420

45,483

10,130

11,647

23,706

2,317

731

697

890

Great Plains Kansas

2,999 1,362

355 231

708 417

1,936 714

42,855 19,316

2,053 1,395

9,770 5,837

31,032 12,084

1,827 813

147 93

463 274

1,216 446

Nebraska

961

75

214

672

13,383

385

2,783

10,215

596

32

141

424

North Dakota

307

22

32

254

4,500

138

452

3,910

189

9

21

160

South Dakota

369

27

46

297

5,657

135

699

4,823

228

13

28

187

South

34,559

10,189

12,270

12,100

498,420

93,753

188,420

216,247

22,150

6,301

8,194

7,656

Southcentral Arkansas

13,992 1,395

3,644 628

4,601 255

5,746 513

209,935 16,680

36,629 3,349

70,909 4,135

102,397 9,197

8,615 675

1,974 195

3,039 166

3,602 315

1,069

157

265

647

19,617

1,762

4,785

13,070

679

100

173

406

520

87

207

226

8,739

660

3,437

4,642

353

72

137

145

1,352

449

322

580

24,603

5,498

7,158

11,947

819

247

212

359

Louisiana New Mexico Oklahoma Texas

9,656

2,324

3,551

3,781

140,295

25,360

51,394

63,541

6,088

1,360

2,351

2,377

20,568 1,681

6,545 437

7,669 668

6,354 576

288,486 26,804

57,124 4,521

117,511 10,617

113,850 11,666

13,535 1,148

4,327 353

5,155 434

4,054 360

Florida

9,997

3,025

4,051

2,921

147,795

32,966

62,632

52,197

7,076

2,463

2,747

1,866

Georgia

4,726

1,143

1,782

1,800

62,493

7,362

25,620

29,511

3,020

644

1,213

1,162

977

296

190

491

14,236

1,789

3,309

9,138

548

120

122

306

3,187

1,644

978

565

37,157

10,486

15,333

11,337

1,745

747

638

359

37,326

8,829

16,335

12,162

485,467

78,612

219,879

186,976

24,830

5,859

11,112

7,859

Mountain Arizona

9,824 3,206

1,473 826

4,750 1,508

3,601 873

132,982 43,882

10,557 5,796

64,279 23,198

58,146 14,888

6,449 2,081

954 506

3,185 1,013

2,309 563

Colorado

3,085

294

1,612

1,179

37,630

1,554

19,059

17,017

2,019

178

1,083

758

853

107

250

496

12,000

923

3,534

7,543

576

91

164

320 145

Southeast Alabama

Mississippi South Carolina

West

Idaho Montana Nevada Utah Wyoming

357

57

68

232

5,988

492

931

4,564

219

31

43

1,248

16

929

303

17,324

121

12,433

4,770

844

13

633

198

901

165

316

420

13,577

1,614

4,388

7,575

600

130

206

264

174

8

68

98

2,581

57

736

1,788

109

4

44

61

Pacific Alaska

27,502 159

7,356 18

11,585 53

8,561 88

352,485 2,110

68,055 146

155,600 467

128,830 1,497

18,382 104

4,905 10

7,927 36

5,550 58

California

4,063

20,362

4,736

9,371

6,255

253,977

36,236

126,428

91,313

13,656

3,165

6,429

Hawaii

745

254

320

171

11,166

3,394

4,492

3,281

531

200

220

112

Oregon

3,173

1,711

660

802

43,980

21,632

9,171

13,177

2,010

1,048

448

515

3,064 147,828

636 34,578

1,181 57,774

1,246 55,475

41,251 1,964,339

6,647 300,677

15,042 753,557

19,561 910,104

2,080 95,084

482 20,796

795 39,013

803 35,275

Washington Total All Regions

* Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce)

28

Great Plains

Production & Manufacturing

Mountain Southcentral

Horticultural Services

Appalachian Southeast

Wholesale & Retail Trade

Northeast Pacific Midwest 0

2

4

6 8 10 Billion Dollars (2004)

12

14

16

Figure 3-1. Output Impacts of the U.S. Green Industry by Region and Industry Group, 2002

Production & Manufacturing

Great Plains Mountain

Horticultural Services

Southcentral Appalachian

Wholesale & Retail Trade

Southeast Northeast Pacific Midwest 0

50

100 150 Thousand Jobs

200

250

Figure 3-2. Employment Impacts of the U.S. Green Industry by Region and Industry Group, 2002

29

Production & Manufacturing

Great Plains Mountain

Horticultural Services

Southcentral Appalachian Southeast

Wholesale & Retail Trade

Northeast Pacific Midwest 0

2

4 6 Billion Dollars (2004)

8

10

Figure 3-3. Value added Impacts of the U.S. Green Industry by Region and Industry Group, 2002

30

Table 3-3. Output Impacts of the U.S. Green Industry by Sector and State, 2002 State

Lawn & Land- HorticulNursery Garden Landscape tural & Green- Equip. & scaping Archi- WholeGrnhse. Services house tecture salers Mfg

Garden Building Food General Equip- Lawn & Total Material & merchment Garden Florists All Supply beverage andise Whole- Stores Sectors Stores stores stores sale

Output Impacts ($Mn)* Alabama 411 26 627 41 26 47 189 Alaska 18 0 46 6 2 0 19 Arizona 596 230 1,393 115 56 49 311 Arkansas 73 555 240 15 7 75 232 California 4,470 266 8,269 1,102 485 297 2,517 Colorado 289 5 1,408 204 42 76 521 Connecticut 453 0 1,080 62 29 34 329 Delaware 53 0 213 16 6 16 60 Florida 3,006 19 3,801 250 446 119 748 Georgia 567 577 1,664 118 101 156 690 Hawaii 254 0 274 46 10 7 41 Idaho 107 0 239 11 3 52 337 Illinois 432 526 2,621 256 224 284 1,288 Indiana 276 246 1,096 44 25 106 654 Iowa 106 28 306 23 7 183 569 Kansas 114 118 378 39 16 119 357 Kentucky 132 6 353 20 16 45 385 Louisiana 149 7 244 21 14 49 271 Maine 52 4 227 26 2 10 81 Maryland 601 3 1,720 87 54 47 427 Massachusetts 199 1 1,558 230 73 31 417 Michigan 910 211 1,561 236 65 117 756 Minnesota 310 247 877 56 40 220 728 Mississippi 56 241 168 22 15 43 249 Missouri 142 221 676 27 33 107 674 Montana 57 0 62 6 3 32 122 Nebraska 40 35 199 16 4 127 391 Nevada 14 1 897 32 9 19 109 New Hampshire 101 3 298 18 8 13 121 New Jersey 562 18 1,982 146 198 54 443 New Mexico 87 0 184 23 3 12 80 New York 534 217 1,693 194 156 100 927 North Carolina 1,638 118 1,803 122 41 152 592 North Dakota 18 4 31 1 1 95 109 Ohio 756 547 2,248 107 159 255 821 Oklahoma 429 20 305 17 19 46 252 Oregon 1,693 18 602 58 28 58 407 Pennsylvania 1,321 56 1,909 183 76 97 830 Rhode Island 67 0 226 7 9 3 18 South Carolina 445 1,199 933 44 32 29 220 South Dakota 23 4 41 4 8 48 181 Tennessee 548 1,193 910 65 26 77 524 Texas 2,276 48 3,179 372 169 276 1,505 Utah 160 5 302 14 9 28 174 Vermont 34 3 111 9 3 10 75 Virginia 373 211 1,760 109 29 73 647 Washington 630 6 1,096 85 61 78 606 West Virginia 40 0 141 6 4 6 62 Wisconsin 424 1,281 957 89 25 154 751 Wyoming 8 0 62 5 2 14 39 Total All States 26,053 8,526 52,971 4,803 2,879 4,146 22,859 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce).

117 75 29 12 194 89 64 59 1,210 725 247 126 159 114 31 28 617 439 384 198 30 41 46 21 479 427 211 166 94 60 85 57 102 87 110 79 44 30 222 196 291 263 380 286 239 207 60 48 216 169 29 22 61 39 66 35 70 50 326 259 53 26 528 509 311 160 21 13 355 294 86 74 114 66 407 364 28 26 120 63 24 15 198 137 703 454 94 39 26 20 244 236 196 113 37 35 214 129 13 18 9,982 7,195

24 5 60 11 355 51 35 6 153 67 10 8 82 33 20 17 21 24 11 60 74 63 43 11 37 6 11 18 13 93 10 142 52 3 78 15 29 105 7 23 5 33 157 18 6 57 52 7 35 3 2,263

98 1,681 21 159 114 3,206 66 1,395 665 20,362 117 3,085 54 2,350 19 448 399 9,997 204 4,726 31 745 29 853 278 6,897 152 3,010 62 1,459 63 1,362 90 1,257 100 1,069 23 509 107 3,524 102 3,239 258 4,845 134 3,099 65 977 186 2,488 18 357 37 961 48 1,248 35 729 131 4,210 41 520 265 5,265 165 5,155 11 307 237 5,855 88 1,352 100 3,173 242 5,589 12 403 78 3,187 14 369 142 3,854 517 9,656 57 901 6 302 174 3,914 140 3,064 32 371 112 4,170 9 174 6,150 147,828

31

Billion Dollars (2004) 0 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia W ashington W est Virginia W isconsin W yoming

2

4

6

8

10

12

14

Production & Manufacturing Horticultural Services W holesale & Retail Trade

Figure 3-4. Output Impacts of the U.S. Green Industry by State and Industry Group, 2002

32

Table 3-4. Employment Impacts of the U.S. Green Industry by Sector and State, 2002 State

Lawn & Garden Nursery Land- HorticulBuilding Garden LandEquip- Lawn & Food & General & scape tural Material Total All scaping ment Garden Florists beverage merchanEquip. & Sectors GreenArchitec- WholeSupply Services Whole- Stores stores dise stores house Grnhse. ture salers Stores sale Mfg

Alabama 4,521 Alaska 143 Arizona 4,781 Arkansas 733 California 35,268 Colorado 1,529 Connecticut 4,796 Delaware 375 Florida 32,821 Georgia 4,690 Hawaii 3,394 Idaho 919 Illinois 2,555 Indiana 2,192 Iowa 646 Kansas 851 Kentucky 1,911 Louisiana 1,712 Maine 642 Maryland 5,650 Massachusetts 3,406 Michigan 8,526 Minnesota 1,983 Mississippi 657 Missouri 1,639 Montana 491 Nebraska 159 Nevada 110 New Hampshire 1,444 New Jersey 6,968 New Mexico 656 New York 4,525 North Carolina 12,478 North Dakota 119 Ohio 7,676 Oklahoma 5,405 Oregon 21,554 Pennsylvania 13,562 Rhode Island 895 South Carolina 4,882 South Dakota 109 Tennessee 10,757 Texas 25,038 Utah 1,583 Vermont 310 Virginia 4,956 Washington 6,616 West Virginia 1,087 Wisconsin 3,774 Wyoming 49 Total All States 261,408

137 10,027 3 400 1,015 21,970 2,616 3,980 968 115,134 26 17,234 11 10,691 0 3,010 145 59,935 2,672 24,250 0 4,038 4 3,404 2,110 24,818 1,215 14,155 176 4,158 544 5,330 30 5,370 50 4,414 22 2,998 16 21,702 4 14,659 743 16,066 1,169 5,891 1,132 2,995 901 9,667 1 872 226 2,626 11 12,067 26 3,428 74 21,878 4 2,410 819 17,198 514 27,658 19 442 2,401 30,400 94 6,909 78 8,436 241 23,589 0 2,404 5,605 14,770 26 647 5,847 12,865 322 36,804 31 4,238 12 1,264 815 24,768 31 14,196 4 2,245 6,355 10,765 8 682 39,270 689,854

Employment Impacts (jobs) 590 809 529 68 53 3 1,228 1,534 454 155 257 753 11,294 11,793 2,536 1,825 1,095 746 523 655 264 184 179 170 2,697 9,868 1,195 1,370 2,169 1,560 454 343 49 130 99 539 1,909 4,327 2,597 477 793 1,018 213 252 1,844 507 496 1,150 274 538 494 370 539 602 254 58 117 894 1,293 457 1,890 1,474 240 2,045 1,576 1,187 510 1,039 2,036 314 598 439 327 1,244 1,133 60 86 375 157 162 1,305 366 186 190 157 160 128 1,340 3,590 444 316 100 143 1,507 3,093 920 1,414 1,199 1,141 10 32 1,059 1,093 3,416 2,787 249 674 510 735 719 546 1,844 2,167 944 70 214 30 563 936 330 52 240 497 929 791 748 3,959 4,445 2,768 150 286 347 81 62 115 1,292 863 762 846 1,577 730 58 146 61 882 691 1,482 53 55 143 48,683 68,969 40,617

3,786 307 4,945 3,844 31,352 6,990 4,479 876 12,661 11,400 685 4,559 15,641 10,323 8,092 5,791 6,725 5,256 1,508 6,641 5,038 10,617 10,018 3,928 12,056 2,372 5,576 1,745 1,844 5,907 1,772 11,640 10,365 1,652 13,103 4,951 6,381 13,186 265 4,249 2,693 9,437 25,386 3,175 1,196 11,014 8,956 1,328 11,567 639 347,916

1,753 2,610 381 376 2,548 2,923 929 2,014 13,822 19,131 2,697 3,283 1,685 2,604 430 716 8,175 11,951 4,687 5,495 440 1,153 739 950 5,378 10,571 2,914 5,477 1,391 2,582 1,159 2,085 1,474 2,832 1,730 2,700 621 995 2,607 4,905 2,978 5,364 4,675 8,354 2,789 5,870 951 1,826 2,929 4,558 465 861 871 1,426 801 932 852 1,353 3,461 6,095 739 1,039 5,890 10,688 4,018 4,947 314 552 4,645 8,979 1,245 2,670 1,388 2,249 4,859 9,845 331 752 1,769 2,244 379 647 2,521 3,910 8,645 12,248 1,227 1,347 334 609 3,030 5,914 2,374 3,320 582 1,316 2,795 4,634 173 552 123,591 200,451

457 80 785 233 4,195 636 497 99 2,477 1,156 155 154 1,217 627 407 327 430 497 218 817 1,046 1,062 742 252 619 105 236 236 231 1,247 173 2,113 921 76 1,389 318 460 1,776 121 479 112 636 2,374 310 125 879 720 183 654 60 35,117

1,722 26,804 297 2,110 1,700 43,882 1,167 16,680 8,484 253,977 1,571 37,630 822 27,026 320 6,359 5,870 147,795 3,045 62,493 456 11,166 502 12,000 3,986 75,110 2,524 41,714 1,059 20,820 1,076 19,317 1,571 21,649 1,746 19,617 391 7,826 1,744 46,725 1,453 37,553 3,893 58,745 1,972 34,018 1,145 14,236 2,618 37,690 301 5,988 639 13,383 679 17,324 532 10,153 1,925 52,929 676 8,028 3,721 62,113 2,818 67,472 225 4,500 3,953 79,841 1,579 24,603 1,435 43,980 3,816 75,829 209 5,289 1,329 37,157 255 5,657 2,373 50,812 7,675 129,664 885 13,577 119 4,225 2,612 56,905 1,885 41,251 620 7,631 1,883 45,483 166 2,581 93,443 1,949,321

33

Thousand Jobs 0 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia W ashington W est Virginia W isconsin W yoming

50

100

150

200

250

300

Production & Manufacturing Horticultural Services W holesale & Retail Trade

Figure 3-5. Employment Impacts of the U.S. Green Industry by State and Industry Group, 2002

34

Table 3-5. Value Added Impacts of the U.S. Green Industry by Sector and State, 2002 State

Lawn & Garden Nursery Garden Green- Land- Land- Horticul- Equip- Lawn Building Food & General Total & scape tural & Material house scaping ment Florists beverage merchan- All Equip. & GreenArchitec- WholeGarden Supply stores dise stores Sectors Mfg Services Wholehouse Grnhse. ture salers Stores Stores sale Mfg

Value Added Impacts ($Mn)* Alabama 345 9 4 405 29 17 31 122 Alaska 10 0 0 31 5 1 0 13 Arizona 435 71 2 929 84 37 32 204 Arkansas 58 137 2 154 11 4 49 146 California 3,079 86 10 5,644 785 324 199 1,657 Colorado 177 2 1 939 144 28 50 340 Connecticut 375 0 0 742 46 19 23 223 Delaware 44 0 0 138 11 4 10 39 Florida 2,456 7 5 2,562 185 294 79 488 Georgia 468 176 5 1,127 86 67 103 453 Hawaii 200 0 0 186 33 7 5 28 Idaho 91 0 0 156 8 2 34 220 Illinois 268 162 7 1,786 186 147 187 826 Indiana 156 73 4 714 32 17 70 412 Iowa 53 10 2 199 17 5 121 362 Kansas 55 39 1 246 27 11 79 225 Kentucky 110 2 1 230 15 11 30 245 Louisiana 97 3 2 158 15 9 32 174 Maine 38 1 1 147 18 2 7 53 Maryland 477 1 0 1,166 64 37 31 288 Massachusetts 122 0 0 1,062 163 49 21 279 Michigan 479 85 2 1,060 161 43 77 485 Minnesota 154 84 1 576 40 26 145 464 Mississippi 52 68 2 106 16 10 28 158 Missouri 77 57 3 450 20 22 71 430 Montana 31 0 0 39 4 2 21 78 Nebraska 18 13 6 129 12 3 84 248 Nevada 13 1 1 610 23 6 13 73 New Hampshire 61 2 2 195 13 5 8 79 New Jersey 430 6 1 1,354 105 133 36 297 New Mexico 72 0 0 121 17 2 8 53 New York 374 64 2 1,219 144 105 67 621 North Carolina 1,347 40 5 1,173 88 27 101 382 North Dakota 8 1 0 20 1 1 61 69 Ohio 436 171 3 1,479 77 101 163 524 Oklahoma 241 6 1 199 13 12 31 159 Oregon 1,043 5 1 406 42 19 38 265 Pennsylvania 904 20 3 1,300 130 50 65 531 Rhode Island 41 0 0 151 5 6 2 12 South Carolina 394 353 1 606 32 21 19 143 South Dakota 12 2 1 25 3 6 32 114 Tennessee 301 387 5 603 46 17 51 335 Texas 1,340 20 18 2,086 264 111 181 962 Utah 128 2 1 195 10 6 18 111 Vermont 24 1 0 72 6 2 7 49 Virginia 248 60 1 1,170 80 20 48 427 Washington 480 2 1 734 61 41 52 397 West Virginia 13 0 0 92 4 3 4 39 Wisconsin 238 492 3 633 64 17 102 478 Wyoming 4 0 0 40 4 1 9 25 Total All States 18,076 2,720 110 35,564 3,449 1,907 2,737 14,806 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce).

75 38 19 6 127 51 40 28 797 424 161 70 107 66 20 15 402 251 252 113 21 24 30 10 308 238 133 84 60 30 53 29 65 44 71 42 29 15 150 115 194 155 244 155 152 112 38 24 138 89 18 11 39 20 44 20 45 27 218 150 34 14 354 298 201 87 14 6 226 159 54 38 74 36 260 195 19 14 78 33 15 7 127 73 449 247 60 21 17 10 161 130 128 61 24 17 136 66 8 9 6,491 3,977

14 3 38 6 226 32 23 4 92 41 7 5 50 19 12 10 12 14 7 39 46 38 26 7 22 3 7 11 8 58 6 89 31 2 46 9 18 63 5 14 3 20 94 10 4 35 33 4 20 2 1,385

63 1,148 14 104 74 2,081 41 675 437 13,656 76 2,019 36 1,659 13 297 259 7,076 133 3,020 21 531 19 576 177 4,335 95 1,804 39 906 40 813 57 821 64 679 15 331 72 2,440 68 2,159 164 2,991 85 1,864 41 548 118 1,495 12 219 23 596 32 844 22 465 87 2,875 27 353 177 3,511 106 3,583 7 189 150 3,532 56 819 66 2,010 154 3,672 8 262 50 1,745 9 228 91 2,050 332 6,088 37 600 4 196 115 2,493 92 2,080 20 220 70 2,317 6 109 3,973 95,084

35

Billion Dollars (2004) 0 Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia W ashington W est Virginia W isconsin W yoming

2

4

6

8

10

12

14

Production & Manufacturing Horticultural Services W holesale & Retail Trade

Figure 3-6. Value Added Impacts of the U.S. Green Industry by State and Industry Group, 2002

36

0

Billion Dollars (2004) 4 6

2

8

10

California Florida

W holesale & Retail Trade

Texas Illinois Ohio

Horticultural Services

Pennsylvania New York

Production & Manufacturing

North Carolina Michigan Georgia

Figure 3-7. Output Impacts of the U.S. Green Industry in Leading States, 2002

Thousand Jobs 0

20

40

60

80

100

120

140

California Florida Texas Illinois Ohio Pennsylvania New York North Carolina Michigan

W holesale & Retail Trade Horticultural Services Production & Manufacturing

Georgia

Figure 3-8. Employment Impacts of the U.S. Green Industry in Leading States, 2002

37

Billion Dollars (2004) 0

1

2

3

4

5

6

7

California Florida Texas

W holesale & Retail Trade

Illinois Ohio

Horticultural Services

Pennsylvania New York North Carolina

Production & Manufacturing

Michigan Georgia

Figure 3-9. Value Added Impacts of the U.S. Green Industry in Leading States, 2002

1.68%

Oregon 1.43%

Idaho

1.37%

South Carolina

1.31%

Florida Wisconsin

1.17%

Arizona

1.16%

Maryland

1.16%

Hawaii

1.16%

North Carolina Colorado Tennessee

1.15% 1.08% 1.04%

Figure 3-10. Rank Order of States by Green Industry Share of Gross State Product, 2002

38

Table 3-6. Green Industry Share of Gross State Product, 2002 Total Value Added Gross State Green Industry Impact of Green Product (Mn$)* Share of GSP Industry (Mn$)* Alabama 1,148 130,678 0.878% Alaska 104 30,917 0.336% Arizona 2,081 178,773 1.164% Arkansas 676 74,857 0.902% California 13,656 1,423,454 0.959% Colorado 2,019 186,712 1.081% Connecticut 1,659 172,490 0.962% Delaware 297 49,069 0.606% Florida 7,076 541,684 1.306% Georgia 3,020 318,276 0.949% Hawaii 531 45,789 1.160% Idaho 576 40,127 1.434% Illinois 4,335 505,925 0.857% Indiana 1,804 213,287 0.846% Iowa 906 102,230 0.886% Kansas 813 93,151 0.873% Kentucky 821 127,259 0.645% Louisiana 679 136,940 0.496% Maine 331 40,628 0.815% Maryland 2,440 210,096 1.161% Massachusetts 2,159 299,813 0.720% Michigan 2,991 365,584 0.818% Minnesota 1,864 208,204 0.895% Mississippi 548 71,950 0.761% Missouri 1,495 195,176 0.766% Montana 219 24,741 0.886% Nebraska 596 63,443 0.940% Nevada 844 84,486 0.999% New Hampshire 465 48,338 0.962% New Jersey 2,875 395,642 0.727% New Mexico 353 55,693 0.635% New York 3,511 824,295 0.426% North Carolina 3,583 312,435 1.147% North Dakota 189 20,585 0.920% Ohio 3,532 404,025 0.874% Oklahoma 819 98,998 0.827% Oregon 2,010 119,824 1.678% Pennsylvania 3,672 446,408 0.823% Rhode Island 262 38,493 0.682% South Carolina 1,745 127,334 1.370% South Dakota 228 26,0201 0.877% Tennessee 2,050 197,860 1.036% Texas 6,088 804,935 0.756% Utah 600 75,944 0.790% Vermont 196 20,402 0.961% Virginia 2,493 299,294 0.833% Washington 2,080 242,421 0.858% West Virginia 220 47,371 0.464% Wisconsin 2,317 198,410 1.168% Wyoming 109 21,111 0.517% Total All States 95,084 10,830,712 0.878% * Expressed in 2004 dollars using GDP Implicit Price Deflator. Source for GSP: U.S. Dept. Commerce, Bureau of Economic Analysis State

39

4. Results for Production and Manufacturing Sectors Production and manufacturing activity in the Green Industry includes the sectors for nursery and greenhouse, lawn and garden equipment manufacturers, and greenhouse manufacturers (prefabricated metal buildings). The activities included within each sector are indicated in Table 4-1. Nursery, Greenhouse and Floriculture Production (NAICS 1114). This sector is comprised of establishments primarily engaged in growing nursery products, nursery stock, shrubbery, bulbs, fruit stock, sod, and so forth, under cover or in open fields and/or growing short rotation woody trees with a growth and harvest cycle of 10 years or less for pulp or tree stock. As a cross reference to other related industry sectors, establishments primarily engaged in growing vegetable and melon bedding plants are classified under Vegetable and Melon Farming (NAICS 11121); establishments primarily engaged in operating timber tracts (i.e., growing cycle greater than 10 years) are classified under Timber Tract Operations (113110); establishments primarily engaged in producing seedling trees for planting for commercial timber production are classified under Forest Nurseries and Gathering of Forest Products (113210); establishments primarily engaged in retailing nursery, tree stock, and floriculture products primarily purchased from others are classified under Nursery, Garden Center, and Farm Supply Stores (NAICS 444220). Lawn and Garden Equipment Manufacturing (NAICS 333112). This sector is comprised of establishments primarily engaged in manufacturing of powered lawn mowers, lawn and garden tractors, and other home lawn and garden equipment such as tillers, shredders, and yard vacuums and blowers. As a cross reference to other related industry sectors, establishments primarily engaged in manufacturing commercial mowing and other turf and grounds care equipment are classified under Farm Machinery And Equipment Manufacturing (NAICS 333111); establishments primarily engaged in manufacturing non-powered lawn and garden shears, edgers, pruners, and lawnmowers are classified under Cutlery and Handtool Manufacturing (NAICS 33221).

Table 4-1. Products Included in the Production and Manufacturing Sectors of the Green Industry Industry Sector/Subsector (NAICS code)

Products

Nursery and Tree Production (111421)

Nursery products, nursery stock, shrubbery, bulbs, fruit stock, sod grown under cover or in open fields, short rotation woody trees with a growing and harvesting cycle of ten years or less.

Floriculture Production (111422)

Cut flowers, roses, cut cultivated greens, potted flowering plants, foliage plants, and flower seeds grown under cover and in open fields.

Lawn & garden tractor and home lawn and garden equipment manufacturing (333112)

Manufacturing of powered lawn mowers, lawn and garden tractors, and other home lawn and garden equipment such as tillers, shredder and yard vacuums and blowers.

Greenhouse manufacturing (Prefab. metal building and component manufacturing, 332311)

Manufacturing prefabricated metal buildings, panels and sections.

Nursery & Greenhouse (1114)

The number of establishments, employment, payroll, and sales receipts for the production and manufacturing sectors of the Green Industry in 2002 are shown in Table 4-2. There were a total of 56,233 business establishments involved in these sectors of the industry, mostly as nursery and greenhouse producers, with a relatively small number of lawn and garden equipment and greenhouse manufacturing firms (145 and 18, respectively). Total sales receipts in 2002 were $23.0 billion (Bn), including $16.4 Bn for nurseries, $6.5 Bn for lawn & garden equipment manufacturers, and $121 Mn for greenhouse manufacturers. The production and manufacturing sectors represented about 16 percent of the overall Green Industry sales receipts. Nursery and greenhouse firms are typically rather small, with average annual sales of $291,800, compared to average sales of $44.9 Mn for lawn and garden equipment manufacturers and $5.7 Mn for greenhouse manufacturers. For lawn and garden equipment manufacturers, total reported employment was 22,201 employees and total payroll was $681 million (Mn). Employment and payroll for greenhouse manufacturers were estimated in proportion to the

40

sales of greenhouses within the larger industry group of Prefabricated Building Manufacturers. Employment for the nursery and greenhouse sector totaled 150,543 employees, with an annual payroll amounting to $4.5 Bn.

Table 4-2. Establishments, Employment, Payroll and Sales in Production and Manufacturing Sectors of the U.S. Green Industry, 2002 Annual Sales Payroll Receipts ($Mn) ($Mn) 56,070 150,543 4,459 16,362 Nursery & Greenhouse 145 22,201 681 6,517 Lawn & Garden Equipment Manufacturing 659 21,756 Greenhouse Manufacturing* 18 121 Total Production/Manufacturing 56,233 173,043 26,839 23,000 * Payroll and employment estimated proportional to merchandise or product line sales as share of total sales. Sources: 2002 Economic Census (US Census Bureau), and 2002 Census of Agriculture (USDA). Industry Sector

Establishments

Paid Employees

Economic impact estimates for the production and manufacturing sectors are summarized in Table 4-3. Total impacts for this industry group included output of $34.6 billion (Bn), employment impacts of 300,677 jobs, value added of $20.8 Bn, labor income of $11.0 Bn, and indirect business taxes of $784 Mn. The nursery and greenhouse sector was the largest in this group by all measures, with $26.1 Bn in output impacts, 261,408 jobs, $18.1 Bn in value added, $9.6 Bn in labor income, and $647 Mn in indirect business taxes. The lawn and garden equipment manufacturing sector had total impacts of $8.3 Bn in output, 37,343 jobs, $2.6 Bn in value added, $1.3 Bn in labor income, and $129 Mn in indirect business taxes. Greenhouse manufacturing had total output impacts of $244 Mn, employment impacts of 1,927 jobs, value added impacts of $110 Mn, labor income impacts of $78 Mn, and indirect business tax impacts of $7 Mn. Collectively, the production and manufacturing sectors represented 23 percent of overall Green Industry output impacts, 15 percent of employment impacts, and 22 percent of value added impacts.

Table 4-3. Economic Impacts of the Production and Manufacturing Sectors of the U.S. Green Industry, 2002 Industry Sector

Output ($Mn)*

Employment (jobs)

Value Added ($Mn)*

Labor Income ($Mn)*

Nursery & Greenhouse 26,053 261,408 18,076 9,612 Lawn & Garden Equipment Manufacturing. 8,281 37,343 2,610 1,346 Greenhouse Manufacturing 244 1,927 110 78 Total Production & Manufacturing 34,578 300,677 20,796 11,037 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce)

Indirect Business Taxes ($Mn)* 647 129 7 784

Nursery and Greenhouse Sector Total economic impacts and other characteristics of the nursery and greenhouse industry sector are summarized by state in Table 4-4. For the nursery and greenhouse sector, the top five individual states in terms of output impacts were California ($4.47 Bn), Florida ($3.01 Bn), Texas ($2.28 Bn), Oregon ($1.69 Bn), and North Carolina ($1.64 Bn). Collectively, these top five states accounted for 30 percent of farms, 50 percent of industry output impacts, 49 percent of employment impacts, and 51 percent of value added impacts. The second tier of states with large output impacts included Pennsylvania ($1.32 Bn), Michigan ($910 Mn), Ohio ($756 Mn), Washington ($630 Mn), and Maryland ($602 Mn). Combined, these top 10 states represented 66 percent of total industry output impacts, while the top 20 states represented 86 percent. The two top states of California and Florida both had over 4,000 nursery and greenhouse farms, while Oregon and Pennsylvania had over 3,000 farms, and Texas, North Carolina, Michigan, Ohio, Tennessee and New York all had over 2,000 farms. The states of California and Florida had value added impacts of $3.08 Bn and $2.46 Bn, respectively. The employment impacts

41

represented an average of 15.4 jobs per million dollars output by the nursery and greenhouse sector, and the value added impacts amounted to 69 percent of total output impacts. Total economic impacts are influenced by the proportion of output sold outside the region (“export share”), which varied from a high of 93 percent for Hawaii to less than 5 percent for Colorado.

Lawn and Garden Equipment and Greenhouse Manufacturing Sectors Total economic impacts of the lawn and garden equipment manufacturing industry sector are summarized by state in Table 4-5. For the this sector, the top five individual states in terms of output impacts were Wisconsin ($1.27 Bn), South Carolina ($1.20 Bn), Tennessee ($1.18 Bn), Georgia ($565 Mn) and Arkansas ($549 Mn). These top five states accounted for 19 percent of industry firms, 58 percent of output impacts, 61 percent of employment impacts, and 59 percent of value added impacts. The second tier of states with large output impacts included Ohio ($539 Mn), Illinois ($511 Mn), Minnesota ($245 Mn), California ($244 Mn) and Indiana ($238 Mn). These top 10 states represented 79 percent of total industry output impacts, while the top 20 states represented 98 percent. These results indicate that this sector is more concentrated than the nursery and greenhouse sector. The top three states of Wisconsin, South Carolina and Tennessee each had employment impacts in excess of 5,000 jobs from this industry, and value added impacts exceeding $300 Mn. The employment impacts represented an average of 5.5 jobs per million dollars output by this sector, and the value added impacts amounted to 32 percent of total output impacts. The share of output exported from the state varied from a high of 57 percent (Iowa) to less than 10 percent for more than half of the states estimated. Total economic impacts of the greenhouse manufacturing industry sector are summarized by state in Table 4-6. For the this sector, the top five individual states in terms of output impacts were Texas ($38 Mn), California ($21 Mn), Nebraska ($15 Mn), Illinois ($15 Mn) and Georgia ($12 Mn). These top five states accounted for 29 percent of industry firms, 42 percent of output impacts, 40 percent of employment impacts, and 43 percent of value added impacts. A second tier of states with large output impacts included North Carlina ($12 Mn), Tennessee ($10 Mn), Florida ($10 Mn), Alabama ($9 Mn) and Indiana ($8 Mn). These top 10 states represented 62 percent of total industry output impacts, while the top 20 states represented 84 percent. The top two states of Texas and California each had employment impacts in excess of 150 jobs from this industry, and value added impacts exceeding $10 Mn. The employment impacts represented an average of 15.3 jobs per million dollars output by this sector, and the value added impacts amounted to 45 percent of total output impacts. The share of output exported from the state was typically over 90 percent, and one states exported all (100%) of production.

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Table 4-4. Economic Impacts of the U.S. Nursery and Greenhouse Sector by State, 2002 EmployValue Labor Indirect ment Added Income Business Tax State Impacts Impacts Impacts Impacts (jobs) ($Mn)* ($Mn)* ($Mn)* California 4,423 3,286.6 4,470.3 35,268 3,079.0 1,733.1 87.7 Florida 4,718 1,844.1 3,006.2 32,821 2,456.3 1,230.3 86.3 Texas 2,137 1,381.4 2,275.6 25,038 1,340.0 771.0 57.4 Oregon 3,039 806.9 1,692.6 21,554 1,042.6 700.7 49.4 North Carolina 2,587 937.4 1,637.9 12,478 1,346.7 574.5 50.9 Pennsylvania 3,073 732.7 1,321.3 13,562 904.1 541.3 36.5 Michigan 2,185 628.7 910.1 8,526 479.4 15.6 16.3 Ohio 2,678 562.7 755.9 7,676 435.7 236.0 12.1 Washington 1,883 391.9 629.9 6,616 480.1 304.1 14.9 Maryland 769 318.0 601.5 5,650 477.1 255.2 17.3 Arizona 367 284.5 595.7 4,781 434.7 255.3 18.6 Georgia 1,199 315.3 566.8 4,690 467.6 206.7 18.4 New Jersey 1,828 356.9 562.0 6,968 430.3 231.2 14.9 Tennessee 2,323 282.8 548.0 10,757 301.1 175.5 14.7 New York 2,552 344.3 533.9 4,525 373.8 218.6 13.7 Connecticut 685 245.8 452.7 4,796 374.7 208.1 13.9 South Carolina 771 321.7 445.2 4,882 394.3 118.7 11.5 Illinois 1,108 357.5 431.8 2,555 268.2 138.8 6.7 Oklahoma 578 222.6 428.9 5,405 240.9 142.7 11.5 Wisconsin 1,487 234.5 423.8 3,774 238.2 150.2 10.7 Alabama 797 251.5 411.0 4,384 344.8 142.1 12.1 Virginia 1,241 218.7 372.6 4,956 248.0 143.3 9.4 Minnesota 983 224.4 310.2 1,983 153.6 91.2 5.6 Colorado 535 261.4 289.5 1,529 176.6 103.0 3.1 Indiana 1,117 187.5 276.2 2,192 155.9 85.7 5.8 Hawaii 1,386 110.3 254.4 3,394 200.1 132.8 7.7 Massachusetts 902 153.5 198.9 3,406 122.0 82.6 3.1 Utah 275 119.4 160.0 1,583 128.4 74.9 3.1 Louisiana 665 87.8 149.3 1,712 97.5 55.9 3.8 Missouri 932 101.3 142.1 1,639 76.7 44.2 2.7 Kentucky 1,193 96.1 132.4 1,911 109.7 54.2 3.1 Kansas 369 57.6 113.6 851 54.6 33.6 3.1 Idaho 458 66.3 107.0 919 90.6 55.7 2.7 Iowa 554 77.6 106.3 646 52.6 27.9 1.9 New Hampshire 337 53.7 101.1 1,444 61.1 39.8 2.7 New Mexico 223 60.3 86.7 656 71.6 42.3 1.9 Arkansas 330 47.0 72.8 733 57.5 27.5 1.9 Rhode Island 225 37.6 67.0 895 41.5 25.6 1.7 Montana 318 33.8 56.8 491 31.2 19.2 1.3 Mississippi 390 47.3 55.6 657 52.0 21.7 1.2 Delaware 129 33.3 53.4 375 44.4 18.5 1.5 Maine 769 37.3 51.7 642 38.2 22.4 1.0 Nebraska 355 34.3 40.0 159 18.5 10.5 0.4 West Virginia 371 26.8 39.7 1,087 12.7 8.5 0.6 Vermont 418 22.8 33.8 310 24.0 14.4 0.7 South Dakota 119 18.4 22.8 109 11.7 6.1 0.3 Alaska 111 12.7 18.0 143 10.2 5.5 0.4 North Dakota 78 11.0 17.8 119 7.8 4.7 0.4 Nevada 50 10.1 14.5 110 12.8 8.2 0.3 Wyoming 50 6.4 7.8 49 4.4 2.7 0.1 Total 56,070 16,362.4 26,052.9 261,408 18,075.9 9,612.4 647.1 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce). Number Farms

Output ($Mn)

Output Impacts ($Mn)*

Export Share 20.7% 41.3% 39.1% 77.7% 62.0% 56.7% 34.3% 28.6% 46.9% 58.7% 83.5% 57.8% 51.5% 66.9% 50.0% 76.1% 33.5% 11.6% 66.7% 67.6% 58.4% 52.5% 24.9% 4.5% 38.0% 93.4% 20.3% 20.2% 59.6% 27.7% 35.4% 80.1% 52.4% 33.1% 70.4% 35.5% 52.9% 80.5% 69.0% 14.3% 62.4% 32.7% 12.5% 45.8% 43.0% 22.0% 41.9% 71.7% 32.5% 20.2%

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Table 4-5. Economic Impacts of the U.S. Lawn & Garden Equipment Manufacturing Sector by State, 2002 Employment Impacts (jobs)

Value Added Impacts ($Mn)*

Labor Income Impacts ($Mn)*

Wisconsin 8 3,157 101 964 1,274 6,308 South Carolina 3 3,157 101 964 1,196 5,585 Tennessee 8 3,033 95 908 1,183 5,768 Georgia 7 1,473 47 450 565 2,573 Arkansas 3 1,473 47 450 549 2,572 Ohio 9 1,473 47 450 539 2,340 Illinois 7 1,473 47 450 511 2,006 Minnesota 6 631 20 193 245 1,151 California 8 591 23 220 244 813 Indiana 12 778 21 199 238 1,149 Mississippi 3 631 20 193 235 1,090 Arizona 3 631 20 193 225 974 Missouri 4 631 20 193 215 851 New York 3 631 20 193 212 788 Virginia 1 631 20 193 210 803 Michigan 6 534 20 188 206 707 Kansas 5 316 10 96 116 531 North Carolina 3 316 10 96 106 413 Pennsylvania 10 147 5 45 50 195 Iowa 1 51 2 15 23 135 Nebraska 2 51 2 15 20 99 Alabama 3 51 2 15 17 65 New Jersey 3 51 2 15 17 62 Oklahoma 1 51 2 15 17 67 Oregon 1 51 2 15 17 65 Texas 5 29 1 9 10 39 Florida 5 52 1 8 9 60 Washington 4 16 0 5 5 19 Total 145 22,201 709 6,782 8,281 37,343 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce).

490 352 383 171 135 168 155 83 75 69 66 69 55 61 59 83 38 35 17 8 7 5 5 5 4 2 2 2 2,610

258 213 203 91 72 87 78 44 38 36 34 35 28 30 29 3 18 17 8 4 4 2 3 2 2 1 1 1 1,346

State

Establish -ments

Employment (jobs)

Annual Wages ($1000)*

Output ($Mn)*

Output Impacts ($Mn)*

Indirect Business Tax Impacts ($Mn)* 24 18 21 10 7 7 7 5 3 3 3 3 2 3 2 3 2 1 1 0 0 0 0 0 0 0 0 0 129

Export Share 29.7% 27.6% 27.8% 22.1% 28.7% 23.0% 9.5% 24.6% 9.5% 17.9% 26.8% 18.1% 9.5% 9.5% 9.5% 9.5% 23.4% 9.5% 9.5% 56.8% 29.6% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5%

Results shown for states with at least 10 employees.

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Table 4.6. Economic Impacts of the U.S. Greenhouse Manufacturing Sector by State, 2002 Value Added Impacts ($Mn)*

Labor Income Impacts ($Mn)*

Texas 89 3,291 18 38 283 18 California 46 1,790 10 21 155 10 Illinois 29 1,174 7 15 105 7 Nebraska 43 1,479 8 15 128 6 Georgia 39 1,059 6 12 99 5 North Carolina 36 1,194 7 12 100 5 Florida 29 888 5 10 84 5 Tennessee 25 941 5 10 79 5 Alabama 25 892 5 9 72 4 Indiana 23 754 4 8 65 4 Ohio 26 737 4 7 61 3 Arkansas 16 576 3 6 44 2 Missouri 15 548 3 6 49 3 Pennsylvania 15 501 3 6 46 3 Wisconsin 15 592 3 6 48 3 Arizona 16 449 2 5 41 2 Iowa 17 502 3 5 42 2 Louisiana 15 478 3 5 39 2 Michigan 12 467 3 5 36 2 Mississippi 16 582 3 5 42 2 New York 11 449 2 5 31 2 Oklahoma 10 294 2 3 27 1 Total 659 22,642 126 244 1,927 110 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce).

13 7 5 5 4 4 3 3 3 3 2 2 2 2 2 2 1 1 0 2 2 1 78

State

Employment

Annual Wages ($1000)*

Output ($Mn)*

Output Impacts ($Mn)*

Employment Impacts (jobs)

Indirect Business Tax Impacts ($Mn)* 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7

Export Share 95.1% 97.8% 98.6% 96.3% 96.5% 96.8% 98.3% 98.2% 97.5% 99.5% 99.6% 97.0% 97.5% 99.9% 98.7% 97.3% 98.5% 96.4% 100.0% 97.1% 99.1% 97.1%

Results shown for states with at least 10 employees.

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5. Results for the Horticultural Service Sectors Horticultural service firms include those that provide a plethora of lawn and landscape design, installation (construction), and maintenance services. This section also includes definitions for each major industry sector within the horticultural services industry. These include Landscape Services (561730) and Landscape Architectural Services (541320), which are described in more detail below (Table 5-1).

Table 5-1. Specialties for Horticultural Service Firms. Landscape Service Firms Arborist Services Plant And Shrub Maintenance In Buildings Cemetery Plot Care Services Plant Maintenance Services Fertilizing Lawns Pruning Services, Ornamental Tree And Shrub Garden Maintenance Services Seasonal Property Maintenance Services (I.E., Snow Plowing) Hydroseeding Services (e.g., Decorative, Erosion Seeding Lawns Control Purposes) Landscape Care And Maintenance Services Shrub Services (e.g, Bracing, Planting, Pruning, Removal, Spraying) Landscape Contractors (Except Construction) Snow Plowing Services Combined With Landscaping Services Landscape Installation Services Sod Laying Services Landscaping Services (Except Planning) Spraying Lawns Lawn Care Services (e.g., Fertilizing, Mowing, Tree And Brush Trimming, Overhead Utility Line Seeding, Spraying) Lawn Fertilizing Services Tree Pruning Services Lawn Maintenance Services Tree Removal Services Lawn Mowing Services Tree Services (e.g., Bracing, Planting, Pruning, Removal, Spraying) Lawn Seeding Services Tree Surgery Services Lawn Spraying Services Tree Trimming Services Line Slash (i.e., Rights Of Way) Maintenance Services Tropical Plant Maintenance Services Maintenance Of Plants And Shrubs In Buildings Turf (Except Artificial) Installation Services Mowing Services (e.g., Highway, Lawn, Road Strip) Weed Control And Fertilizing Services (Except Crop) Ornamental Tree And Shrub Services Landscape Architectural Service Firms Architects' Offices, Landscape Landscape Architectural Services Architects' Private Practices, Landscape Landscape Consulting Services Architectural Services, Landscape Landscape Design Services City Planning Services Landscape Planning Services Garden Planning Services Ski Area Design Services Golf Course Design Services Ski Area Planning Services Industrial Land Use Planning Services Town Planners' Offices Land Use Design Services Town Planning Services Land Use Planning Services Urban Planners' Offices Landscape Architects' Offices Urban Planning Services Landscape Architects' Private Practices Landscaping Services (561730). This industry sector comprises: (1) establishments primarily engaged in providing landscape care and maintenance services and/or installing trees, shrubs, plants, lawns, or gardens and (2) establishments primarily engaged in providing these services along with the design of landscape plans and/or the construction (i.e., installation) of walkways, retaining walls, decks, fences, ponds, and similar structures. As a cross-reference, firms in this sector do not include establishments primarily engaged in: installing artificial turf or in constructing or installing walkways, retaining walls, decks, fences, ponds, or similar structures, which are

46

classified in under Construction (Sector 23); planning and designing the development of land areas for projects, such as parks and other recreational areas; airports, highways, hospitals, schools, land subdivisions, and commercial, industrial, and residential areas (without also installing trees, shrubs, plants, lawns/gardens, walkways, retaining walls, decks, and similar items or structures), which are classified in, Landscape Architectural Services (541320); retailing landscaping materials and providing the installation and maintenance of these materials, which are classified under Nursery, Garden Center, and Farm Supply Stores (444220). Landscape Architectural Services (541320). This industry sector is comprised of establishments primarily engaged in planning and designing the development of land areas for projects, such as parks and other recreational areas; airports; highways; hospitals; schools; land subdivisions; and commercial, industrial, and residential areas, by applying knowledge of land characteristics, location of buildings and structures, use of land areas, and design of landscape projects. Cross-references in the NAICS database do not include establishments primarily engaged in providing landscape care and maintenance services and/or installing trees, shrubs, plants, lawns, or gardens along with the design of landscape plans, which are classified under Landscaping Services (561730). Sales, payroll, and employment data for the horticultural services sector are presented in Table 5-2. Within the total number of firms providing horticultural services (82,683), 93 percent are in the Landscape Services sector (76, 458 firms), with the remaining firms offering Landscape Architectural Services (6,225 firms). These sectors combined represent 32 percent of the total number of establishments included in the study. Although landscape service only represent roughly one-third of the number of establishments, they employ almost 51 percent of the total number of paid employees, with an annual payroll exceeding $11.5 billion. Again, firms in the landscape service sector dominated the employment and payroll breakdown, representing 93 percent of the paid employees and 90 percent of the annual payroll. The $38.8 Bn in sales for the landscape sector made up almost 27 percent of the total sales for all sectors included in the study ($145.4 Bn), with landscape services firms and landscape architectural firms representing 91 percent and 9 percent, respectively.

Table 5-2. Sales and Employment in the U.S. Horticultural Services Sectors, 2002 Industry Sector

Establishments

Landscaping Services 76,458 Landscape Architectural Services 6,225 Total Horticultural Services 82,683 Sources: 2002 Economic Census (US Census Bureau)

Paid Employees 514,962 36,679 551,641

Annual Payroll ($Mn) 11,509 1,330 12,839

Sales Receipts ($Mn) 35,235 3,569 38,804

Table 5-3 presents estimates of the economic impacts of the horticultural services sectors in the U.S. In terms of output, the landscaping services sector represents 92 percent of total horticultural services industry output, whereas landscape architecture firms represent the remaining 8 percent. Additionally, landscaping service firms accounted for 93 percent of the persons employed in the horticultural services industry at $11.5 Bn in labor income. The horticultural services industry as a whole also paid $1.3 Bn in indirect business taxes, roughly 20 percent of that paid by all sectors included in the survey. In terms of value added, the horticultural services sectors contributed $39 Bn, which was almost 41 percent of the total value added for all sectors in this study.

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Table 5-3. Economic Impacts of the U.S. Horticultural Services Sectors, 2002

52,971

704,875

35,564

27,719

Indirect Business Taxes ($Mn)* 1,312

4,803

48,683

3,449

2,549

74

Total Horticultural Services 57,774 753,557 39,013 30,269 * Values expressed in 2004 dollars (GDP Implicit Price Deflator, US Dept. Commerce).

1,387

Industry Sector Landscaping Services Landscape Architecture

Output Impacts ($Mn)*

Employment (jobs)

Value Added ($Mn)*

Labor Income ($Mn)*

Landscape Services Tables 5-4 and 5-5 present the economic impacts of the landscape services and landscape architectural sectors by state, respectively. The top 5 states providing landscape services include (in rank order): California, Florida, Texas, Illinois, and Ohio with impacts ranging from $8.3 Bn for California to $2.2 Bn for Ohio. These top five states represent 38 percent of the national total, with combined impacts of a little over $20 billion. The next five states in terms of importance are New Jersey, Pennsylvania, North Carolina, Virginia, and Maryland. The top 10 states combined represent 55 percent of the national economic impacts for landscape services, while the top 20 states account for 81 percent ($42.8 Bn) of the national total. In terms of the 704,875 jobs created by the landscape services sector nationally, the top five employment states (California, Florida, Texas, Ohio, and North Carolina) account for 280,562 of them, representing 40 percent of the national work force. Illinois, Virginia, Georgia, Pennsylvania, and Arizona are the next five highest employing states, adding another 119,335 jobs and, when combined with the top five states, represent 57 percent of the national workforce. Considering these top 10 states, along with the next 10 states, then the top 20 employing states account for 80 percent of the national workforce.

Landscape Architecture The top five states providing landscape architectural services include (in rank order): California, Texas, Illinois, Florida, and Michigan with impacts ranging from $1.1 Bn for California to $236 Mn for Michigan. These top five states represent 46 percent of the national total, with combined impacts of a little over $2.2 billion. The next five states in terms of importance are Massachusetts, Colorado, New York, Pennsylvania, and New Jersey. The top 10 states combined represent two-thirds (66 percent) of the national economic impacts for landscape services, while the top 20 states account for 86 percent ($4.1 Bn) of the national total. In terms of the 48,683 jobs created by the landscape services sector nationally, the top five employment states (California, Texas, Florida, Michigan, and Illinois) account for 21,904 of them, representing 45 percent of the national landscape architectural work force. Massachusetts, Pennsylvania, Colorado, New York, and North Carolina are the next 5 highest employing states, adding another 8,480 jobs and, when combined with the top five states, represent 62 percent of the national workforce. Considering these top 10 states, along with the next 10 states, then the top 20 employing states account for 84 percent of the national landscape architect workforce.

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Table 5-4. Economic Impacts of the U.S. Landscaping Services Sector by State, 2002 Indirect Business Establish- EmployOutput Rank State Tax ments ment ($Mn)* Impacts ($Mn)* Total 76,458 514,962 11,978 36,670 52,971 704,875 35,564 27,719 1,312 1 California 7,271 86,446 1,790 5,480 8,269 115,134 5,644 4,523 215 2 Florida 6,308 45,096 843 2,580 3,801 59,935 2,562 2,045 98 3 Texas 3,617 36,772 726 2,223 3,179 47,435 2,086 1,675 80 4 Illinois 2,997 16,952 614 1,879 2,621 24,818 1,786 1,449 63 5 Ohio 3,431 22,854 537 1,644 2,248 30,400 1,479 1,200 48 6 New Jersey 3,568 16,163 462 1,414 1,982 21,878 1,354 1,095 49 7 Pennsylvania 3,488 18,960 490 1,501 1,909 23,589 1,300 1,067 41 8 North Carolina 2,620 17,939 337 1,033 1,803 27,658 1,173 910 53 9 Virginia 2,040 17,829 387 1,183 1,760 24,768 1,170 938 43 10 Maryland 1,598 13,940 344 1,054 1,720 21,702 1,166 929 45 11 New York 4,807 15,907 512 1,567 1,693 17,198 1,219 1,033 29 12 Georgia 2,268 18,886 392 1,199 1,664 24,250 1,127 910 41 13 Michigan 2,933 12,539 410 1,254 1,561 16,066 1,060 32 32 14 Massachusetts 2,468 9,515 350 1,070 1,558 14,659 1,062 858 39 15 Colorado 1,523 11,552 296 907 1,408 17,234 939 749 38 16 Arizona 1,373 15,461 281 860 1,393 21,970 929 733 39 17 Indiana 1,592 9,992 251 768 1,096 14,155 714 573 27 18 Washington 1,952 10,331 248 760 1,096 14,196 734 592 27 19 Connecticut 1,791 6,900 233 715 1,080 10,691 742 592 29 20 Wisconsin 1,475 6,829 213 653 957 10,765 633 508 24 21 South Carolina 1,306 8,900 163 499 933 14,770 606 420 29 22 Tennessee 1,193 8,913 194 593 910 12,865 603 477 24 23 Nevada 576 7,719 168 516 897 12,067 610 479 27 24 Minnesota 1,501 5,883 184 562 877 9,570 576 459 23 25 Missouri 1,468 8,936 202 619 676 9,667 450 380 11 26 Alabama 833 6,994 131 402 627 10,027 405 318 16 27 Oregon 1,079 6,324 143 439 602 8,436 406 329 14 28 Kansas 619 3,859 87 266 378 5,330 246 199 9 29 Kentucky 755 4,098 85 259 353 5,370 230 186 8 30 Iowa 658 3,134 76 233 306 4,158 199 162 7 31 Oklahoma 551 6,469 89 273 305 6,909 199 168 5 32 Utah 680 2,740 63 192 302 4,238 195 156 8 33 New Hampshire 555 2,110 62 190 298 3,428 195 156 8 34 Hawaii 251 2,514 52 158 274 4,038 186 147 8 35 Louisiana 662 4,035 71 217 244 4,414 158 133 4 36 Arkansas 435 2,916 54 166 240 3,980 154 123 6 37 Idaho 453 2,205 52 159 239 3,404 156 124 6 38 Maine 452 1,686 45 137 227 2,998 147 116 6 39 Rhode Island 502 1,185 42 129 226 2,404 151 117 6 40 Delaware 259 1,939 41 125 213 3,010 138 108 6 41 Nebraska 540 2,064 52 159 199 2,626 129 107 4 42 New Mexico 235 2,408 44 135 184 3,121 121 98 4 43 Mississippi 429 2,210 37 114 168 2,995 106 85 4 44 West Virginia 229 1,822 37 114 141 2,245 92 76 3 45 Vermont 282 726 24 73 111 1,264 72 58 3 46 Montana 254 641 16 48 62 872 39 32 1 47 Wyoming 164 437 15 46 62 682 40 32 1 48 Alaska 93 349 14 42 46 400 31 26 1 49 South Dakota 173 541 11 34 41 647 25 21 1 50 North Dakota 149 345 8 25 31 442 20 16 1 Note: export share values shown for TX, MN and NM were taken from 1999 Implan model data to correct unreasonably low values (
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