Demand from export markets has fallen significantly, pushing revenue downward.
New York, NY (PRWEB) March 20, 2015
The Plant and Flower Growing industry has experienced tough times over the past five years. Its traditional products like cut flowers, potted flowers, garden plants and sod have experienced a decline in popularity as gardening as a pastime becomes less common and more consumers transition to busier, urban lifestyles. “Production of most of the industry's staple products is down with market contraction,” according to IBISWorld Industry Analyst Antal Neville. As a result, industry revenue has declined 1.8% per year on average to $1.8 billion in the five years to 2015.
International trade conditions have been especially finicky to industry operators. In the past five years, the Canadian dollar first appreciated, making Canadian products more expensive on the global market and causing exports to contract, then depreciated, leading exports of Canadian products to rise. Exports have grown an annualized 1.6% over the past five years, boosted mainly by a 16.0% jump in 2014. Nevertheless, increasing import penetration has further pushed out domestic producers. “As an emerging economy with low-cost labour, Colombia has significantly increased its flower production in the past five years, becoming a major supplier to both the US and Canadian markets,” says Neville. As these flowers continue to undercut industry prices, imports continue to gain a larger share of the declining market. This import competition will contribute to the 0.9% decline in revenue in 2015.
The next five years promise much of the same trends. The domestic market for plants and flowers is expected to continue declining as consumers lead more fast-paced lifestyles and have less time for gardening. Nevertheless, the market for cut flowers that sell for a premium will partially sustain the industry as these become staple gifts for holidays and birthdays.
For more information, visit IBISWorld’s Plant and Flower Growing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry grows nursery and floriculture products, such as shrubbery, cut flowers, ornamental plants and short rotation woody crops, such as Christmas trees. These plants may be grown under cover or in an open field.
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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