Economic Impacts of the Green Industry in the United States (03-DG-11083150-650)

This project studied the economic impacts of the Green Industry at the national level.

The U.S. environmental horticulture industry, also known as the "Green Industry", is comprised of wholesale nursery and sod growers; landscape architects, designers/builders, contractors and maintenance firms; retail garden centers, home centers and mass merchandisers with lawn and garden departments; and marketing intermediaries such as brokers and horticultural distribution centers (re-wholesalers). Environmental horticulture is one of the fastest growing segments of the nation's agricultural economy. In spite of the magnitude and recent growth in the Green Industry, there is surprisingly little information regarding its' economic impact. Thus, the objective of this study was to estimate the economic impacts of the Green Industry at the national level. In addition, this study evaluated the value and role of forest tree species (woody ornamental trees). Economic impacts for the U.S. Green Industry in 2002 were estimated at $147.8 billion (Bn) in output, 1,964,339 jobs, $95.1 Bn in value added, $64.3 Bn in labor income, and $6.9 Bn in indirect business taxes, with these values expressed in 2004 dollars. The total output of tree production and care services was valued at $14.55 Bn, which translated into $21.02 Bn in total output impacts, 259,224 jobs, $14.12 Bn in value added, $9.93 Bn in labor income, and $516 Mn in indirect business tax impacts.

Project objectives:

The objective of this study was to estimate the economic impacts of the Green Industry at the national level, synergistically utilizing the studies that have already been conducted by several states, and complementing those with data from other primary and secondary sources. In addition, this study evaluated the value and role of forest tree species (woody ornamental trees) as a Green Industry product. One of the first steps in accomplishing this objective was to collect and compare all of the aforementioned statewide economic impact studies. The methodologies used by the researchers in developing their respective estimates have differed somewhat and those differences needed to be resolved statistically to overcome any comparison problems. These studies were supplemented with a combination of other secondary information sources including, but not limited to: USDA/ERS crop-level data for nursery crops, SIC data generated by each state Comptroller, North American Industrial Classification (NAICS) data, Economic Census (conducted by the U.S. Census Bureau) data, and USDA Census of Horticultural Specialties data. In addition to these secondary data, primary market research data generated by the 4th Nursery Industry survey conducted by the S290 Multi-stateRegional Research Committee were used. S290 is a group of agricultural economists and horticulturists from 24 land-grant institutions across the country (including the principal investigators of this project). It is through S290 survey efforts scheduled for early 2004 that detailed sales data regarding forest tree species to cities and municipalities were collected. From the secondary data and primary data that was generated, an estimate of further economic impacts was developed for the grower, landscape services, and retail sectors using IMPLAN Professional® (Impact Analyses and Planning), a computer software package that assists in estimating multipliers for input-output models and associated databases. Multipliers were then used to measure total changes in output, income, employment, or value added. For a particular industry, multipliers estimated three components of total economic impact within the given area: (1) direct effects that represented the initial value of the industry in question, (2) indirect effects that reflected the value of supplying industries responding to increased demands from the directly affected industries, and (3) induced effects that reflected changes in local spending that result from income changes in the directly and indirectly affected industry sectors.

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