Los Angeles, CA (PRWEB) June 17, 2012
The Landscape Design industry hit a rough patch during the recession but is on its way to fresh growth. Landscape architects rely heavily on downstream construction markets for demand. “Because new housing development and commercial construction drastically fell at the onset of the economic crisis,” says IBISWorld industry analyst Olivia Tang, landscape designers suffered. Consequently, revenue is expected to slide an average of 7.4% annually to $4.2 billion over the five years to 2012. In 2012, a marginal increase in the value of residential and non-residential construction is expected to boost industry revenue a meager 1.2%.
Smaller firms were hit particularly hard by the poor housing market because they rely more heavily on residential projects. Many of these firms have left the industry altogether, causing the number of enterprises to decline an average of 1.2% annually to 43,781 in the five years to 2012. According to Tang, many large firms acquired smaller firms to strengthen revenue during the recession. Large players also reduced employee head counts and wages to cut costs. However, some large firms benefited from an increase in infrastructure spending stemming from the American Recovery and Reinvestment Act. The Landscape Design industry remains characterized by a large number of very small firms, though, with the largest four firms accounting for less than a tenth of total market share.
To compete with one another for limited business during the recession, landscape design companies lowered prices, which ate into profit. However, as business recovered and firms raised prices, profit is expected to bounce back to 4.8% of revenue in 2012, a significant increase from the previous year. IBISWorld anticipates the increase in demand to allow continued profit improvement.
During the next five years, demand for landscape design is forecast to grow due to an anticipated increase in new construction. One-third of revenue is derived from residential design projects, so improvements in these markets will be key to industry growth. Rising demand will also increase profit margins because firms will have more leverage to raise prices. For more information, visit IBISWorld’s Landscape Design in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry plan and design the development of land by applying their knowledge of land characteristics, locations of buildings and structures, and use of land areas to the design. Firms work on recreational areas, airports, highways, schools, and land subdivisions in commercial, industrial and residential areas. This industry does not include landscaping services that involve landscape care and maintenance services like installing and caring for trees, lawns or gardens.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.