• Topics: Food and Resource Economics  | Environmental Horticulture Industry  |   |  Haydu, John  | Hall, Charles Roy 

Economic Impacts of the Green Industry in the United States¹

The following is the abstract of a much larger report, which is only available in pdf format. To access the complete report, please click here or go to (http://edis.ifas.ufl.edu/pdffiles/FE/FE56600.pdf).

Acknowledgments

This research report was made possible by a grant from USDA-Forest Service, National Urban and Community Forestry Advisory Committee. Others who contributed to the effort by providing information or technical reviews included John Brooker, Jennifer Davis, David Mulkey, Tom Stevens, and members of the Green Industry Research Consortium (S-290 Multi-State Research Committee of USDA/CSREES).

Introduction

The environmental horticulture industry is comprised of a diverse mix of production, service, and trade-type businesses, including wholesale nursery and sod growers, landscape contractors and maintenance firms, retail garden centers, home centers and mass merchandisers with lawn and garden departments, brokers, and horticultural distribution centers. The industry is one of the fastest growing segments of the nation's agricultural economy, often experiencing growth and expansion even during recessionary periods. The industry contributes significantly to personal income and job growth in local and regional economies. Numerous studies have been conducted to document the industry's economic impacts in individual states or regions; however, the present study represents the first attempt to evaluate economic impacts of the industry for the entire United States.

Methods

Economic impacts of the environmental horticulture industry were estimated using a variety of statistical information sources: output and employment by sector in the North American Industry Classification System (NAICS) from the U.S. Economic Census for 2002 (United States Census Bureau, 2004/05) and Census of Agriculture (USDA/NASS, 2004); state-level data on employment from County Business Patterns (United States Census Bureau, 2004); and market channel surveys by horticulture economics researchers (National Nursery Survey, 2004). Regional economic models and Social Accounting Matrices for each state in the United States were constructed using the Implan Pro™ software and associated state databases (MIG, Inc, 1999). These models account for regional differences in industry structure, income levels, consumer spending, trade flows, taxes, capital investment, and transfer payments (Miller and Blair, 1985). The models allow derivation of economic multipliers that capture the secondary impacts of industry purchases (indirect effects) and employee household spending (induced effects), as well as direct impacts for industry output or revenues, value added, employment, labor income, and indirect business taxes. Output of the wholesale and retail trade sectors was taken as the gross margin on sales, ranging from 23 to 29 percent. Impact estimates for 2002 were expressed in 2004 dollars using the GDP Implicit Price Deflator (United States Department of Commerce, 2005).

Results and Discussion

Economic impacts for the U.S. environmental horticulture 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 (Table 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 in Table 2. Total value-added impacts were largest in the Midwest region ($19.2 Bn), followed by the Pacific region ($18.4 Bn), Northeast region ($17.9 Bn), and Southeast region ($13.5 Bn). The largest individual states in terms of value added impacts, all exceeding $3 Bn, 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).

In addition to these monetary and employment impacts of commercial activity in the environmental horticulture industry, various studies have shown that well-landscaped homes, with appropriate tree canopy, may have a 7 to 11 percent premium in value compared to similar properties without such landscaping. Furthermore, 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.

Literature and Information Sources Cited

MIG, Inc. 1999. Implan Professional, version 2.0, Social Accounting & Impact Analysis Software: User's Guide, Analysis Guide and Data Guide. Stillwater, MN: MIG, Inc..

Miller, R.E. and P.D. Blair. 1985. Input-output analysis: Foundations and extensions. Englewood Cliffs, NJ: Prentice Hall.

National Nursery Survey. S-290 Multi-state project USDA/CSREES. Unpublished data analyzed by Alan Hodges, University of Florida, 2005.

U.S. Census Bureau. 2004. 2002 County Business Patterns, EPCD, County & State Database on NAICS Basis. United States Department of Commerce, Washington, D.C. (December).

U.S. Census Bureau. 2004. Annual Benchmark Report for Retail Trade and Food Services: January 1992 through February 2004. Current Business Reports BR/03-A, United States Department of Commerce, Washington, D.C. (March).

U.S. Census Bureau. 2004. Annual Benchmark Report for Wholesale Trade: January 1992 through December 2003. Current Business Reports BW/03-A, United States Department of Commerce, Washington, D.C. (March).

U.S. Census Bureau. 2004 & 2005. 2002 Economic Census, United States Department of Commerce, Washington, D.C., various reports as follows:

• Architectural, Engineering and Related Services, EC02-541-03 (October 2004).

• Building Material and Supplies Dealers, EC02-441-1 (November 2004).

• Farm, Floral and Nursery Supplies, EC02-421-15 (November 2004).

• Florists, EC02-441-16 (August 2004).

• Food and Beverage Stores, EC02-441-07 (September 2004).

• General Merchandise Stores, EC02-441-11 (October 2004).

• Lawn and Garden Equipment & Supplies Stores, EC02-441-08 (September 2004).

• Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing, EC02-311-333112 (RV) (December 2004).

• Machinery, Equipment and Supplies, EC02-421-09 (September 2004).

• Prefabricated Metal Building and Component Manufacturing, EC02-311-332311 (RV) (January 2005).

• Services to Buildings and Dwellings, EC02-561-07 (June 2004).

U.S. Department of Agriculture, National Agricultural Statistics Service (USDA/NASS). 2004. 2002 Census of Agriculture. United States Summary and State Data, Volume 1, Geographic Area Series, Part 51, AC-02-A-51. United States Department of Agriculture, Washington, D.C. (June).

U.S. Department of Commerce. Gross Domestic Product Implicit Price Deflators (quarterly). 2004. Bureau of Economic Analysis, Washington, D.C. (December 22). http://research.stlouisfed.org/fred/data/gdp/gdpdef.

Tables

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Millie Ferrer, Interim Dean.

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