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Publication #FE566

Economic Impacts of the Green Industry in the United States1

Charles R. Hall, Alan W. Hodges, and John J. Haydu2

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/media/fe566/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 US 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 US 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/fred2/data/GDPDEF.txt.

Tables

Table 1. 

Summary of economic impacts of U.S. environmental horticulture industry by sector, 2002.

Industry Group/Sector (NAICS)

Output

Employment

Value Added

Labor Income

Indirect Taxes

 

($Mn)*

(jobs)

($Mn)*

($Mn)*

($Mn)*

Production & Manufacturing

34,578

300,677

20,796

11,037

784

Nursery & Greenhouse (1114)

26,053

261,408

18,076

9,612

647

Lawn & Garden Equipment Mfg (333112)

8,281

37,343

2,610

1,346

129

Greenhouse Mfg (332311)

244

1,927

110

78

7

Horticultural Services

57,774

753,557

39,013

30,269

1,387

Landscaping Services (56173)

52,971

704,875

35,564

27,719

1,312

Landscape Architecture (54132)

4,803

48,683

3,449

2,549

74

Wholesale & Retail Trade

55,475

910,104

35,275

23,044

4,701

Wholesale Flowers, Nursery Stock, and Florist Supplies (42293)

2,879

68,969

1,907

1,130

440

Garden Equipment Wholesale (421820)

4,146

40,617

2,737

1,601

657

Lawn & Garden Stores (4442)

22,859

347,916

14,806

9,747

1,810

Building Material Supply Stores (4441)

9,982

123,591

6,491

4,258

789

Florists (4531)

7,195

200,451

3,977

2,725

401

Food & Beverage Stores (445)

2,263

35,117

1,385

944

156

General Merchandise Stores (452)

6,150

93,443

3,973

2,639

488

Total

147,828

1,964,339

95,084

64,349

6,872

* Values expressed in 2004 dollars (GDP Implicit Deflator, United States Department of Commerce)

Table 2. 

Economic impacts of the U.S. environmental horticulture industry by region and state, 2002.

Region or State

Output Impacts

Employment Impacts

Value Added Impacts*

All Sectors

Production & Manufacturing

Horticultural Services

Wholesale & Retail

 

($Mn)*

(jobs)

($Mn)

($Mn)

($Mn)

($Mn)

EAST

41,118

540,496

27,033

5,494

11,749

9,790

Northeast

26,568

336,027

17,867

2,986

8,250

6,632

Connecticut

2,350

27,026

1,659

375

787

496

Delaware

448

6,359

297

44

148

104

Maine

509

7,825

331

39

166

126

Maryland

3,524

46,725

2,440

478

1,230

732

Massachusetts

3,239

37,553

2,159

122

1,225

811

New Hampshire

729

10,153

465

63

208

194

New Jersey

4,210

52,929

2,875

436

1,459

980

New York

5,265

62,113

3,511

437

1,363

1,711

Pennsylvania

5,589

75,829

3,672

924

1,430

1,319

Rhode Island

403

5,289

262

41

156

65

Vermont

302

4,225

196

25

78

93

Appalachian

14,550

204,469

9,166

2,508

3,500

3,159

Kentucky

1,257

21,649

821

112

245

464

North Carolina

5,155

67,472

3,583

1,387

1,261

935

Tennessee

3,854

50,812

2,050

689

648

713

Virginia

3,914

56,905

2,493

308

1,249

936

West Virginia

371

7,631

220

13

96

111

CENTRAL

34,825

439,955

21,070

3,142

7,958

9,970

Midwest

31,825

397,099

19,243

2,994

7,494

8,754

Illinois

6,897

75,110

4,335

430

1,972

1,933

Indiana

3,010

41,714

1,804

229

745

830

Iowa

1,459

20,820

906

62

216

627

Michigan

4,845

58,745

2,991

564

1,221

1,205

Minnesota

3,099

37,696

1,864

237

616

1,010

Missouri

2,488

37,690

1,495

134

470

890

Ohio

5,855

79,841

3,532

607

1,556

1,369

Wisconsin

4,170

45,483

2,317

731

697

890

Great Plains

2,999

42,855

1,827

147

463

1,216

Kansas

1,362

19,316

813

93

274

446

Nebraska

961

13,383

596

32

141

424

North Dakota

307

4,500

189

9

21

160

South Dakota

369

5,657

228

13

28

187

SOUTH

34,559

498,420

22,150

6,301

8,194

7,656

Southcentral

13,992

209,935

8,615

1,974

3,039

3,602

Arkansas

1,395

16,680

675

195

166

315

Louisiana

1,069

19,617

679

100

173

406

New Mexico

520

8,739

353

72

137

145

Oklahoma

1,352

24,603

819

247

212

359

Texas

9,656

140,295

6,088

1,360

2,351

2,377

Southeast

20,568

288,486

13,535

4,327

5,155

4,054

Alabama

1,681

26,804

1,148

353

434

360

Florida

9,997

147,795

7,076

2,463

2,747

1,866

Georgia

4,726

62,493

3,020

644

1,213

1,162

Mississippi

977

14,236

548

120

122

306

South Carolina

3,187

37,157

1,745

747

638

359

WEST

37,326

485,467

24,830

5,859

11,112

7,859

Mountain

9,824

132,982

6,449

954

3,185

2,309

Arizona

3,206

43,882

2,081

506

1,013

563

Colorado

3,085

37,630

2,019

178

1,083

758

Idaho

853

12,000

576

91

164

320

Montana

357

5,988

219

31

43

145

Nevada

1,248

17,324

844

13

633

198

Utah

901

13,577

600

130

206

264

Wyoming

174

2,581

109

4

44

61

Pacific

27,502

352,485

18,382

4,905

7,927

5,550

Alaska

159

2,110

104

10

36

58

California

20,362

253,977

13,656

3,165

6,429

4,063

Hawaii

745

11,166

531

200

220

112

Oregon

3,173

43,980

2,010

1,048

448

515

Washington

3,064

41,251

2,080

482

795

803

TOTAL

147,828

1,964,339

95,084

20,796

39,013

35,275

* Values expressed in 2004 dollars (GDP Implicit Price Deflator, United States Department of Commerce)

Footnotes

1.

This document is FE566, one of a series of the Food and Resource Economics Department, UF/IFAS Extension. Original publication date June 2005. Revised June 2008. Reviewed February 2014. Visit the EDIS website at http://edis.ifas.ufl.edu.

2.

Charles R. Hall, professor, Department of Agricultural Economics, University of Tennessee, Knoxville, TN; Alan W. Hodges, associate-in, Department of Food and Resource Economics; and John J. Haydu, professor, Department of Food and Resource Economics, UF/IFAS Mid-Florida Research and Education Center; UF/IFAS Extension, Gainesville, FL 32611.


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 UF/IFAS Extension publications, contact your county's UF/IFAS Extension office.

U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS, Florida A & M University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.