As the housing market slows down and commercial demand grows, the landscaping industry should continue to see steady growth despite labor shortages. According to IBISWorld, a rebounding economy and commercial construction will likely drive demand for the landscaping industry, which has been experiencing consistent growth since 2018. Economic conditions may slow the rate of growth down from an average of 8.1% between 2018-2023 to a projected 3.0%, but there are still plenty of reasons to be optimistic about this $176.5 billion industry.
The Impact of Residential and Commercial Demand
Demand for landscaping services has long been tied to how strong the property market is, whether that’s residential or commercial. After the housing boom in 2020-2021 nearly halted to stop due to rising mortgage rates in 2022, it’s projected that the number of residential clients will continue to grow as the housing market strengthens and consumer financial health stays strong because people are investing more in their properties now than the past few years.
Residential landscaping demand continues to be highest in the Southeast, thanks to a high share of our country’s population, large single-family housing markets with large yards, and warm weather year-round. Landscaping demand is also high in the Mid-Atlantic due to above-average median household incomes and a need for snow and ice management in the winter.
That being said, nonresidential construction – like resort and hotel ground projects that were put on hold – will increase over the next five years as people resume traveling. It’s not all about new construction, though, maintenance on existing college, business, and hotel campuses is picking back up as well, offering steady work for landscaping companies.
Want to learn how to manage the labor shortage and the four keys for success for landscaping businesses in 2023? Download the full report here.
