The Economic Impact of Indianas Green Industry

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The Economic Impact of Indianas Green Industry

• Dr. Jennifer Dennis
• Departments of Horticulture Agricultural
  Economics
• Purdue University
• August 25, 2005
• jhdennis_at_purdue.edu

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Todays Talk

• Economic Impact Studies
• Why are they needed
• Previous Studies
• Illinois Economic Impact Study
• Wisconsin Economic Impact Study
• Indianas Economic Impact
• National Economic Impact Study
• What is the next step?

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Economic Impact Studies

• Document the Green Industrys impact
• Increase or decrease in economic activity
• Derived from an economic impact software program,
  IMPLAN
• Measures economic activity by estimating total
  changes in
• Output
• Income
• Employment
• Value-added activities

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Economic Impact Studies, contd.

• For any industry, IMPLAN estimates three
  components
• Direct Effects
• - Initial value of green industry
• Indirect Effects
• - Values of supplying industries responding to
  increased demands from the directly affected
  industries
• Induced Effects
• - Changes in local spending resulting from income
  changes in direct and indirect affected industry
  sectors

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How do others use economic impact data?

• Universities and colleges use information to
• Create student outreach explaining the importance
  of the industry
• Help plan courses and work with State Boards of
  Education
• Identify needs to be addressed through education,
  research, and outreach
• Industry associations use the information for
• Establishing the value of the green industry
  tying it to local economies
• Creating positive public press
• Attracting new members and trade show exhibitors
• Legislative/regulatory purposes

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Economic Impact Studies

• Illinois
• Wisconsin
• National Study (Indiana)

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Previous StudiesIllinois Green Industry Study

• Those businesses, organizations, individuals, and
  associated properties that produce, design,
  install, maintain, use, or sell plant products to
  enhance human environments
• Direct relationship with managed landscapes,
  interiorscapes, or associated plant materials
  (trees, flowers, turfgrass)
• Excluded production of sale of vegetables, fruit,
  nuts, other consumables and allied industries
  such as manufacturers or equipment and chemicals

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Illinois Economic Impact Study

• Separated into 3 sectors
• (1) Product
• businesses that grow and/or sell natural plant
  materials to enhance human environments
• Growers, Wholesalers Only, and Retailers Only
• Growers are further divided Nurseries Garden
  Centers, Christmas Trees, and Sod Grass Seed.
• Retailers are split into Nurseries Garden
  Centers, Florists, and Other Retail.

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Illinois Economic Impact Study

• (2) Service
• businesses that conduct or offer contractual
  services associated with the design,
  installation, construction, or maintenance of
  landscapes or interiorscapes for the purpose of
  enhancing human environments.
• Segregated into Landscape Design Only, Landscape
  and Lawn Care, Tree Care, and Interiorscape
  companies.

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Illinois Economic Impact Study

• (3) End User
• final consumers of green industry products and
  services.
• airports, cemeteries, churches, commercial areas,
  golf courses and driving ranges, homeowners,
  municipalities, private recreation areas, public
  roadways, schools and universities, and
  utilities.

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Illinois Economic Impact Study
Source http//research.nres.uiuc.edu/report01-01/
pdf/report01-01.pdf
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Illinois Economic Impact Study
Source http//research.nres.uiuc.edu/report01-01/
pdf/report01-01.pdf
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Illinois Economic Impact Study
Source http//research.nres.uiuc.edu/report01-01/
pdf/report01-01.pdf
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Illinois Economic Impact Study Turfgrass

• Turfgrass tidbits
• Illinois end users maintained 1.544 million acres
  of turfgrass
• Single-family homeowners took care of 61 percent
  of these turfgrass acres
• County and state roadways accounted for 10
  percent, municipalities eight percent, commercial
  areas seven percent, golf courses and driving
  ranges about four percent, and schools about four
  percent.
• The remaining six percent was maintained by
  airports, cemeteries, churches, private
  recreation areas, and utilities.
• Approximately five percent of the total, or about
  72,000 acres of turfgrass, was newly established
  in 1999.

Source http//research.nres.uiuc.edu/report01-01/
pdf/report01-01.pdf
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Illinois Economic Impact Study

• Economic employment and income multipliers for
  the green industry were 1.52 and 2.70,
  respectively
• For every job created within the green industry,
  an additional 0.52 jobs are created within the
  overall state economy
• For every dollar paid in green industry wages and
  salaries, an
• additional 1.70 in wages and salaries are
  generated statewide.

Source http//research.nres.uiuc.edu/report01-01/
pdf/report01-01.pdf
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Wisconsin Economic Impact Study

• Production, installation and maintenance of
• Flowers, sod, nursery, landscape products, and
  Christmas trees
• Items directly related to production and
  maintenance of these products (soil, fertilizer,
  and hard goods)

Source http//www.horticulture.wisc.edu/faculty/g
reen_indust_survey.pdf
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Wisconsin Economic Impact Study

• Surveyed
• Producer Sector
• All business and individuals that produced, sold,
  or provided services determined to be green
  related
• Household Sector
• Public/Government Sector
• Employees providing green industry services such
  as schools, state and local government,
  cemeteries, and colleges

Source http//www.horticulture.wisc.edu/faculty/g
reen_indust_survey.pdf
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Wisconsin Economic Impact Study

• 2.7 Billion dollar industry
• Comprised over 4,700 businesses
• Over 43,000 workers
• 10,000 acres of Sod Production

Source http//www.horticulture.wisc.edu/faculty/g
reen_indust_survey.pdf
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Wisconsin Economic Impact Study
30
26
75
17
2
11
4
15
6
4
Source http//www.horticulture.wisc.edu/faculty/g
reen_indust_survey.pdf
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National Green Industry Study

• Gathered by NAICS Code
• Derived from industry statistics
• U.S. Economic Census
• Census of Agriculture (2002)
• County Business Patterns
• Primary surveys by Horticulture Economics
  Researchers

Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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National Green Industry Study

• Businesses involved in production, distribution
  and services associated with ornamental plants,
  landscape and garden supplies and equipment.
• Segments of the industry include
• wholesale nursery, greenhouse and sod growers
• landscape architects, contractors and maintenance
  firms
• retail garden centers, home centers and mass
  merchandisers with lawn and garden departments
• marketing intermediaries such as brokers,
  horticultural distribution centers, and
  re-wholesalers.

Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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National Green Industry Study

• Separated by
• Production Manufacturing
• Horticultural Services
• Wholesale Retail Trade

Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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National Economic Impact Study

• Excludes Some Turf Activities
• Some lawn care (do it yourself or professional)
• sports turf
• commercial grounds
• golf

Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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National Green Industry Study
Indiana 3B in Output or Sales 41,714
jobs 1.8B in value-added for all sectors
Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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National Economic Impact Study
Source http//www.utextension.utk.edu/hbin/greeni
mpact.html
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Next Steps

• National Economic Impact Study has contributed
  greatly to quantifying economic impacts for the
  U.S.
• Purdue University, Departments of Horticulture
  and Agronomy are preparing to conduct a survey of
  the turfgrass industry
• Providing review of related turfgrass economic
  studies

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Next Steps

• Scheduled for January 2006
• Participation is needed to complete missing
  pieces
• Sent to Industry members and non-members