The National Association of Landscape Professionals (NALP) conducted a survey last month of 170 landscape contractor companies to see how their businesses were faring mid-year. Despite — or perhaps because of — COVID, companies are almost evenly split as to whether they are doing better (51%) or worse (49%) than projected. Fortunately, of those who report doing worse than expected, most are only down by a small margin and most also say they aren’t feeling significant negative financial impacts.
Of the companies that reported better than expected revenue, 49% have seen a 10% to 25% increase, while 13% reported a 25% to 50% increase. For the companies whose revenue is down this year, 45% have seen a 1% to 10% decrease in revenue, and 38% had a 10% to 25% decrease in revenue.
LCOs Doing The Best
Lawn care operators (LCOs) are experiencing the most significant revenue gains this year. Sixty-two percent reported that they beat expectations while 53% of landscape maintenance firms and 50% of design/build firms reported better than expected revenues, according to NALP.
Additionally, 54% forecast their revenue will be up by the end of the year, while 46% believe it will be lower than expected revenues.
Residential Services In Demand
Residential services are performing stronger than commercial services in the current economy, with 60% of residential contractors seeing revenues beating expectations for this year, versus only 40% of commercial contractors. The most significant increases in residential services were in landscape installations and design/build installations.
The NALP survey finds residential enhancements are big with 80% percent of residential companies reporting increases in client spending. A little over half (55%) said 1% to 10% of their clients spent more on enhancements and upgrades, while 25% said 11% to 25% of their clients spent more.
Residential services that have seen the most increases include:
- 59% landscape installation work;
- 44% design/build work;
- 43% mowing and maintenance;
- 38% lawn care services;
- 38% tree care services;
- 27% pool-related design build; and
- 25% irrigation services.
Commercial Spending Down Slightly
Of companies serving commercial clients, 40% told NALP their revenue was beating expectations, while 60% say revenue is down a bit. However, 57% of those who have seen a drop have reported only a 1% to 10% loss. How are some coping with losses? 28% of commercial landscape companies said they are considering seeking residential clients to protect against financial difficulties.
Additionally, 80% of commercial respondents have had some clients reduce their budget for seasonal plantings or enhancements: 73% say they’ve had clients reduce regular maintenance; while 59% have had clients cancel maintenance services altogether. While most respondents did have some clients who made a change to their services, it was only a small percentage of them (10% or less).
Also of note: the majority of respondents said hiring is still a major issue, despite high unemployment numbers. 84% of respondents are still looking to hire this year. Find the original NALP blog article by Jill Odom here.