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Economic impacts of drought on the Florida environmental horticulture industry

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Title:
Economic impacts of drought on the Florida environmental horticulture industry
Creator:
Hodges, Alan W.
Haydu, John J.
Place of Publication:
Gainesville, Fla.
Publisher:
Institute of Food and Agricultural Sciences, University of Florida
Publication Date:
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English

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Subjects / Keywords:
Agriculture -- Florida ( LCSH )
Retail trade ( jstor )
Retail stores ( jstor )
Economic impact analysis ( jstor )

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Funding:
Florida Historical Agriculture and Rural Life

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Marston Science Library, University of Florida
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This collection includes the historic publications of the Florida Agricultural Experiment Station and the Florida Cooperative Extension Service, Institute for Food and Agricultural Services (IFAS), University of Florida. As IFAS documents are revised in the online EDIS system, replaced versions will be added to this collection. It also includes annual reports and bulletins from the Florida Department of Agriculture and Consumer Services and publications of the University of Florida Engineering and Industrial Experiment Station.
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Economic Impacts of Drought on the Florida Environmental Horticulture Industry
by Alan W. Hodges, PhD, and John J. Haydu, PhD
University of Florida, Institute of Food & Agricultural Sciences
Food & Resource Economics Department, Gainesville
Revised May 19, 2003

Abstract
An economic impact study of Florida's environmental horticulture industry in year 2000 was
conducted with a telephone survey of over 2,200 businesses and households, and the use of regional
economic models to determine the multiplier effect of income derived from outside the region. The
study also assessed the impact of the ongoing drought in Florida and water use restrictions on the
industry. Wholesale plant producers, landscape services, horticultural retailers and floral importers
had total sales estimated at $9.91 billion (Bn) and total output of $6.89Bn. Direct employment in the
industry was 158,000 persons, with an additional 5,000 jobs created in other related industries. Total
value added generated was $6.40Bn, including $4.12Bn in labor income, and $462 million in taxes
paid to local, state, and federal governments. Purchases of horticultural goods and services by
Florida households and institutions such as hotels, restaurants, and other commercial buildings, were
estimated at $3.31Bn. Plant producers, including nurseries, sod farms, and cut flower/foliage growers
employed 38 thousand persons, managed production area of 173,000 acres, and sold plants valued
at $2.25Bn, of which 41 percent was shipped to markets outside the state. Landscape businesses
employed 61,000 persons, and provided services such as landscape design, construction, and
maintenance and related goods valued at $3.11Bn. Horticultural retailers employed 53,000 persons,
managed 82 million square feet of retail sales space, and had total sales of plants and related
horticultural goods valued at $3.64Bn. Floral importers in Miami-Dade County had sales of $904
million and employed 6,100 persons. In addition, allied suppliers of inputs to the horticulture sector
had sales of $363 million and employed nearly 5,000 persons. Personal consumption expenditures by
employees in the horticulture industry and allied businesses generated $1.91Bn in sales, $1.23Bn in
value added income, and provided nearly 25,000 jobs. The study found that nurseries and landscape
firms experienced a net decrease in sales of $245 million due to drought in 2000, while retailers
reported increased sales, particularly for large volume outlets.

The Environmental Horticulture Industry
Nursery and greenhouse crops represent the sixth largest agricultural commodity group in the
United States, with a farm gate value of $12.12 billion (Bn) in 1998, and are the fastest growing major
segment of U.S. agriculture. Between 1991 and 1998, sales of US nursery and greenhouse crops
increased by 16 percent in inflation-adjusted terms, representing an average annual growth of 2.0
percent. This growth was due to the continued strong demand for plants, driven by a robust economy,
expansion in housing, and increasing per capital consumption. Retail expenditures for plant products
in the US reached $54.79 Bn in 1998, or $203 per capital. In inflation-adjusted terms, per-capita
expenditures increased by 27 percent between 1986 and 1998, or 2.1 percent annually. Nursery and
greenhouse products are classified as floriculture crops and nursery crops. Floriculture crops,
including annual and perennial flowering plants, cut flowers and cut cultivated greens, and foliage
plants, represented $3.93Bn in sales in 1998, while nursery crops such as woody ornamental trees
and shrubs, sod, and unfinished plant products represented $8.18Bn in sales or roughly two-thirds of
industry value.
Florida is one of the leading states in the US nursery and greenhouse industry, ranked second
to California, with a wholesale value of $1.28Bn in 1998. Ornamental plants are one of the largest
agricultural commodity groups in Florida, together with citrus and winter vegetables. Florida
dominates the US market for tropical foliage crops, with over 85 percent of sales. Overall sales for
greenhouse and nursery crops by Florida growers increased by 24 percent during the period 1991-
98, or 10.7 percent in inflation-adjusted terms, representing annual growth of 1.3 percent.








Economic Impacts of Drought on the Florida Environmental Horticulture Industry
by Alan W. Hodges, PhD, and John J. Haydu, PhD
University of Florida, Institute of Food & Agricultural Sciences
Food & Resource Economics Department, Gainesville
Revised May 19, 2003

Abstract
An economic impact study of Florida's environmental horticulture industry in year 2000 was
conducted with a telephone survey of over 2,200 businesses and households, and the use of regional
economic models to determine the multiplier effect of income derived from outside the region. The
study also assessed the impact of the ongoing drought in Florida and water use restrictions on the
industry. Wholesale plant producers, landscape services, horticultural retailers and floral importers
had total sales estimated at $9.91 billion (Bn) and total output of $6.89Bn. Direct employment in the
industry was 158,000 persons, with an additional 5,000 jobs created in other related industries. Total
value added generated was $6.40Bn, including $4.12Bn in labor income, and $462 million in taxes
paid to local, state, and federal governments. Purchases of horticultural goods and services by
Florida households and institutions such as hotels, restaurants, and other commercial buildings, were
estimated at $3.31Bn. Plant producers, including nurseries, sod farms, and cut flower/foliage growers
employed 38 thousand persons, managed production area of 173,000 acres, and sold plants valued
at $2.25Bn, of which 41 percent was shipped to markets outside the state. Landscape businesses
employed 61,000 persons, and provided services such as landscape design, construction, and
maintenance and related goods valued at $3.11Bn. Horticultural retailers employed 53,000 persons,
managed 82 million square feet of retail sales space, and had total sales of plants and related
horticultural goods valued at $3.64Bn. Floral importers in Miami-Dade County had sales of $904
million and employed 6,100 persons. In addition, allied suppliers of inputs to the horticulture sector
had sales of $363 million and employed nearly 5,000 persons. Personal consumption expenditures by
employees in the horticulture industry and allied businesses generated $1.91Bn in sales, $1.23Bn in
value added income, and provided nearly 25,000 jobs. The study found that nurseries and landscape
firms experienced a net decrease in sales of $245 million due to drought in 2000, while retailers
reported increased sales, particularly for large volume outlets.

The Environmental Horticulture Industry
Nursery and greenhouse crops represent the sixth largest agricultural commodity group in the
United States, with a farm gate value of $12.12 billion (Bn) in 1998, and are the fastest growing major
segment of U.S. agriculture. Between 1991 and 1998, sales of US nursery and greenhouse crops
increased by 16 percent in inflation-adjusted terms, representing an average annual growth of 2.0
percent. This growth was due to the continued strong demand for plants, driven by a robust economy,
expansion in housing, and increasing per capital consumption. Retail expenditures for plant products
in the US reached $54.79 Bn in 1998, or $203 per capital. In inflation-adjusted terms, per-capita
expenditures increased by 27 percent between 1986 and 1998, or 2.1 percent annually. Nursery and
greenhouse products are classified as floriculture crops and nursery crops. Floriculture crops,
including annual and perennial flowering plants, cut flowers and cut cultivated greens, and foliage
plants, represented $3.93Bn in sales in 1998, while nursery crops such as woody ornamental trees
and shrubs, sod, and unfinished plant products represented $8.18Bn in sales or roughly two-thirds of
industry value.
Florida is one of the leading states in the US nursery and greenhouse industry, ranked second
to California, with a wholesale value of $1.28Bn in 1998. Ornamental plants are one of the largest
agricultural commodity groups in Florida, together with citrus and winter vegetables. Florida
dominates the US market for tropical foliage crops, with over 85 percent of sales. Overall sales for
greenhouse and nursery crops by Florida growers increased by 24 percent during the period 1991-
98, or 10.7 percent in inflation-adjusted terms, representing annual growth of 1.3 percent.








Study Methods
This study was undertaken to update a previous economic impact study of the Florida
environmental horticulture industry for 1997. Estimation of the economic value of Florida's
horticultural industries was based primarily upon information obtained from surveys conducted with
five different groups: wholesale nurseries, horticultural retailers, landscape service providers,
residential households, and institutional/commercial consumers. The wholesale nurseries, retailers,
and landscape service providers represent the primary business sectors of interest, while the
consumer sectors were surveyed to provide an independent estimate of consumer demand for
horticultural products and services. The information was collected through telephone interviews, and
by fax to provide adequate sampling in some counties. Telephone surveys of horticulture industry
firms and consumers were performed under subcontract by the University of Florida's Bureau of
Economic and Business Research, during the period July to October, 2001. A total of nearly 2,200
completed surveys were done, including 668 nurseries, 409 landscape service firms, 333 horticultural
retailers, 452 institutions, and 321 households. The survey was designed as a simple random
sampling plan within 10 selected Florida counties: Miami-Dade, Broward, Palm Beach, Orange, Lake,
Volusia, Hillsborough, Manatee, Lee, and Gadsden.
Listings of firms for the survey were obtained from a variety of sources. A list of certified
nurseries and stock dealers (horticultural retailers) was obtained from the Florida Department of
Agriculture, Division of Plant Industry. A listing of Florida landscape services firms and commercial or
institutional consumers in selected businesses were taken from the Reference USA database, based
on standard industrial codes (SIC). The commercial-institutional consumer group represented firms
drawn from different including primary schools, colleges/universities, restaurants, hotels,
museums/galleries/gardens, religious organizations, governments, and commercial building
maintenance services. The University of Florida Bureau of Economic and Business Research
provided randomly selected residential households.
Firms interviewed for the survey were as having sold horticultural products or services last
year, while households and commercial/institutional consumers were qualified as having a maintained
landscape at their location last year. A total of nearly 18,000 telephone calls were made for the
survey, of which 12 percent were completed, 0.3 percent were incomplete interviews, 4 percent were
refused, 21 percent had technical difficulties, 50 percent had no answer or were not available. A total
of 66 percent of firms or households that called were ineligible for the survey under the screening
criteria indicated above.
Survey data was collected for fiscal year 2000. Information collected from the primary
business sectors included annual sales, employment, area managed (nurseries, retailers), types of
horticultural goods or services sold, types of plant products sold, sales to different customer markets,
regional sales, marketing practices, changes in business volume and pricing, the outlook for
business, and financial borrowing practices and considerations (nurseries). Information collected
from the consumer sectors included landscape area maintained, value of purchases of plants, other
horticultural goods and horticultural services, types of plant products purchased, types of vendors
purchased from, and factors considered for purchasing plants and selecting vendors. Information was
also collected for the first time on the effect of drought or water use restrictions on horticultural sales
or purchases.
The value of imported fresh cut flowers shipped through the port of Miami were also included
in this economic impact study for the first time. Information on value of sales, employment, and
warehouse space used by importers were obtained from the Association of Floral Importers of Florida
(Miami), whose members represent approximately 85 percent of the floral import industry in Florida.
Output of the retail and trade sectors was taken as the gross margin on sales. For floral importers, a
gross margin of 48.5% was calculated based on the cost of imported product. For the retail sector,
gross margin was taken from averages for the retail sector in Florida reported for the retail industry.
County level information on employment and payroll expense was compiled for nurseries (SIC 018),
retail garden centers (SIC 526), and landscape service firms (SIC 078), from the Florida Department
of Labor, to estimate economic impacts for the major counties in Florida from controlled totals for the








state of Florida.
For each survey variable and derived variable, descriptive statistics were computed, including
the mean (average), standard error, number of respondents, and sum of sample values. The 95
percent confidence interval for the mean was taken as the estimated mean plus or minus 1.96 times
the standard error. The value of sales or purchases by each firm or household were estimated as the
lognormal mean for each to account for the highly skewed distribution of firm sizes. Sales of specific
products or services by industry firms, and sales by market segment or region, were estimated as a
percentage of total sales for each industry sector, with the total controlled to the amount estimated
from the expansion formula. Similarly, purchases of specific products or services by consumers, and
purchases by type of vendor, were estimated as a percentage of total purchases, with the total
amount controlled. Estimates of the total value of sales or purchases for the entire population of firms
or households were based on expansion factors that represent the ratio of the population to the
number sampled, as shown in Table 1. Expansion factors were calculated as F = P/S (1 E), where
F is the expansion factor, P is the Florida population, S is the number of firms/households that
reported sales or total value of purchases, and E is the percentage of firms/households ineligible for
the survey. The population of firms was adjusted down to account for the percentage of firms that
were ineligible for the survey according to the screening questions discussed above.

Table 1. Survey sample and expansion factors, Florida horticulture industry
survey, 2000
Inele Respondents Expansion
Ineligible
Sample elation Cn s Reporting Factor for
Survey Group Population Contacts
Survey Group Number Sales or Sales or
(percent) r, ., ,....,.


rul ulihase


rul ulihase


Nurseries 668 3,888 51.6% 621 3.0
Retailers 333 8,113 52.0% 273 14.3
Landscapers 400 8,467 67.8% 373 7.3
Institutions 452 19,887 55.3% 416 21.4
Households 321 5,881,000 52.0% 309 9136
Total 2,174 1,992

Regional impacts and economic multipliers were developed with an input-out model and social
accounting matrix, IMPLAN Pro software licensed from MIG, Inc, and the associated databases for
Florida, 1999. The IMPLAN databases consist of a set of social/economic accounts which describe
the structure of the US economy in terms of transactions between households, governments, and 528
standardized industry sectors classified on the basis of the primary commodity or service produced
(SIC's). The databases also describe local or regional economies, at the county level, in terms of
industry output, value added, employment, imports and exports. IMPLAN uses a matrix inversion
procedure to develop economic multipliers which reflect the direct, indirect and induced impacts of
specified changes in final demand, output or employment for any given industrial sector. Indirect
impacts result from changes in economic activity of other industrial sectors which supply goods or
services to the sector being evaluated. Induced impacts are the result of personal consumption
expenditures by industry employees. The total economic impact is the sum of direct, indirect and
induced impacts. Multipliers were compiled from IMPLAN for economic output, employment, value
added, labor income, and indirect business taxes. The latter two measures are components of value
added. Economic multipliers represent the strength of backward linkages in the regional economy to
other sectors that supply inputs to an industry.








Regional models of the Florida economy
were constructed with IMPLAN for the state as a North-East
whole, and for six regions (Fig. 1). Multipliers for
North-Wst
the nursery, retail, landscape services, and
wholesale trade sectors are given in Table 2.
Economic impacts of each sector and subregion Cea-Ea
of the horticultural industry were calculated for err
each type of impact using the direct multiplier
multiplied against local or state sales, and the
total effects multiplier multiplied against sales
outside the region. Non-local sales were treated
differently than local sales because they bring Sotth-East
SothVIbst
"new" money into the local economy and expand
its economic activity through the multiplier effect.
Total employment impacts were estimated from
survey data for the direct effects, and from
multipliers for the indirect and induced effects. Figure 1. Florida regions for the horticulture
Results for each region were computed industry.
independently, based on sales, employment,
trade balances, and region-specific multipliers, so the sum of estimated regional impacts may not
necessarily equal the total statewide estimates. Economic impact estimates for 1997 were re-stated
from the previous study using updated economic multiplier. Also the definition of economic output
was changed to represent only the gross margin for the retail sector, and information was added for
the sod, cut flower/foliage and import sectors.

Table 2. Implan output and employment multipliers for Florida horticulture
industry sectors (1999)
Direct Indirect Induced Total
ype/SecorEffects Effects Effects Effects
Output
Nursery 1.000 0.193 1.124 2.317
Landscape Services 1.000 0.329 1.076 2.405
Retail 1.000 0.123 1.274 2.396
Trade (floral imports) 1.000 0.251 1.166 2.417
Employment (jobs/$million output)
Nursery 13.7 3.0 14.5 31.2
Landscape Services 33.9 4.0 14.0 51.9
Retail 20.3 1.4 17.0 38.7
Trade (floral imports) 9.0 3.0 15.6 27.6
Source: Minnesota Implan Group (MIG), Inc., Stillwater, MN. 2002.


Results

Sales of Horticultural Products and Services
The percentage of nursery, retail and landscape firm respondents by annual sales class is
given in Table 3 For all groups, about half of the respondents were in the small category of less than
$250,000 in annual sales. The percentage of respondents with reported annual sales of $250,000 to
$999,000 was 29 percent for nurseries, 16 percent for retailers, and 28 percent for landscape firms.
The percentage of firms with sales exceeding $1 million was 17 percent for nurseries, 12 percent for
retailers, and 17 percent for landscapers. Annual sales information was not available or the
respondent did not know this for about 7 percent of nurseries, 18 percent of retailers, and 8 percent








of landscape firms surveyed.


Table 3. Distribution of annual sales by surveyed firms, 2000
Annual Sales Category Nursery Retail Landscape
less than $250,000 45% 55% 45%
$250,000 to $499,000 17% 9% 17%
$500,000 to $999,000 12% 7% 11%
$1,000,000 to $1,999,999 11% 4% 7%
$2,000,000 to $3,999,999 3% 4% 5%
$4,000,000 to $5,999,999 2% 0% 1%
$6,000,000 to $7,999,999 0% 1% 1%
$8,000,000 to $9,999,999 0% 1% 0%
$10,000,000 or more 1% 2% 3%
Don't know 1% 11% 2%
Not available 6% 7% 6%
Total 100% 100% 100%

Sales of horticultural products and services in years 2000 is summarized in Table 4. Total
sales by Florida producers, service providers, retail and trade businesses in 2000 were $9.867 billion
(Bn). Sales for the producer sector amounted to $2.251Bn, including nurseries ($1.75Bn), sod farms
($307 million), and cut flowers and cultivated greens ($199 million). Sales for landscape firms were
estimated at $3.11Bn. Sales for retailers were $3.64Bn. Sales were $904 million for floral importers.
Total industry sales increased from $7.092Bn in 1997, representing growth of approximately 39
percent, or 13 percent annually. Sales were increased significantly in all sectors. The very large
increase in sales for the retail sector (36%) may represent an underestimate for this group surveyed
in 1997.

Table 4. Sales by Florida horticulture industry, 2000
and growth since 1997
Percent
Sales 2000 P
Sector .Annual
millionn ) Growth 97-00
Production 2,251 7.5%
Nursery 1,745 6.4%
Sod 307 11.3%*
Cut Flowers & Greens 199 4.4%
Landscape 3,110 5.0%
Retail 3,643 36.0%
Trade (floral imports) 904 4.3%
Total 9,867 13.0%
Annual growth rate reflects 4 years.

For purposes of economic impact analysis, sales of horticultural products and services were
compiled by market region. Sales were classified as international, national, state or local, with the
local area defined as the city or county in which the business was located, or within a 50 mile radius.
For nurseries, $995 million or 56 percent of total sales were to state or local markets, while $749M
(43%) of sales were to national and international markets. For retailers and landscapers, 87 percent
and 92 percent of sales, respectively, were to local or state markets. Total output was $6.892Bn, with
in-region output of $5.210Bn (76%) and ex-region output of $1.673Bn (24%).








Horticulture Industry Customers
Sales of horticultural products and services to different types of customers are summarized in
Table 5. For nurseries, the most important customers were re-wholesalers or brokers (20%),
landscape service firms (16%), other growers (16%), independent retail garden centers (14%),
developers (12%), and mass merchant retailers (12%), with direct sales to the public and other
customers representing 6 percent. For retailers and landscape firms, by the most important customer
segment was homeowners, representing 48 percent and 30 percent of total sales, respectively. Other
important customers for retailers and landscape firms were commercial establishments (14%, 17%),
apartments and condominiums (11%, 19%), and landscape firms (11%). In addition, builders and
developers were large customers for landscape services (21%).

Table 5. Sales by type of customer for Florida horticulture industry, 2000
Percent Percent Total Sales
Type of Customer/Sector
ype usome orFirms Sales ($million)
Nursery
Re-wholesalers or brokers 66% 20.4% 356
Landscapers, interiorscapers or lawn maintenance firms 65% 19.8% 345
Growers 61% 16.4% 286
Garden centers and other retailers 42% 14.1% 247
Developers or property managers 33% 11.9% 207
Retail mass merchandisers 23% 11.5% 201
Directly to the public (homeowners) 33% 5.1% 88
Other types customers 5% 0.9% 15
Total 100.0% 1,745
Retail
Homeowners 65% 48.2% 1,755
Commercial establishments (e.g restaurants, hotels, and 49% 13.9% 506
offices)
Apartments and condominiums 46% 11.4% 416
Landscapers, interiorscapers or lawn maintenance firms 18% 11.4% 415
Other retailers 13% 8.8% 322
Government organizations 18% 6.3% 230
Total 100.0% 3,643
Landscape
Homeowners 75% 30.1% 936
Builders or Developers 31% 20.7% 643
Apartments and condominiums 45% 19.4% 604
Commercial establishments 58% 16.6% 515
Government organizations 21% 9.9% 307
Landscapers, interiorscapers or lawn maintenance firms 16% 3.4% 104
Total 100.0% 3,110


Area Managed
Area managed by horticultural producers, retailers, and commercial/institutional consumers is
summarized in Table 6. Total production area was estimated at 173,000 acres, including 70,304
acres for nurseries, 80,347 acres for sod farms, and 22,010 acres for cut flowers/greens. Among
nurseries, there was 22,853 acres in field production, 28,501 acres in open container production, and
18,950 acres (825 million square feet) covered area in greenhouse or shadehouse. Retail sales area
totaled 1,878 acres (82 million square feet), with 63 percent of this space used for live plants.
Landscape area maintained by selected types of institutions surveyed amounted to 238,612 acres.
Landscape area maintained by households was estimated at 419,000 acres.








Table 6. Area managed by the Florida horticulture industry, 2000
Estimated Total
Type of Area
ypeo eArea (Acres)
Production area 172,661
Nurseries 70,304
Field nursery 22,853
Open container nursery 28,501
Greenhouse/shadehouse 18,950
Sod farms 80,347
Cut flowers & cultivated greens 22,010
Retail sales area 1,878
Live Plants 1,180
Lawn and garden supplies 196
Lawn and garden hard goods 115
Other goods 387
Landscape area maintained 657,708
Institutions 238,612
Households 419,096


Total Economic Impacts
Total economic impacts of the horticulture industry were estimated using the IMPLAN input-
output regional modelling system. The total output impact in year 2000 was estimated at $9.16 billion
(Bn), including $6.89Bn in direct output impact from industry sales, plus $363M in indirect impacts
from allied firms that supply inputs to the horticulture industry, and $1.91Bn in induced impacts
associated with consumer spending by industry employees (Table 7). Note that the output of the
retail and import trade sectors represents only the gross margin on sales, and the indirect and
induced impacts applies only to the portion of output sold outside the state of Florida. The estimated
total output impact increased by $2.23Bn between 1997 and 2000, representing a 32 percent
increase, or 10.7 percent annually.
Value added is an important measure of an industry's contribution to a regional economy. It
represents the difference between sales revenues and the cost of purchased inputs, and includes the
value of employee wages and benefits, owner's compensation, dividends, capital outlays and
business taxes paid. The total value added impact by Florida's horticulture industry was $6.40Bn,
including $4.12Bn in labor income. Value added by the horticultural production, service, retail, and
trade sectors were $2.52Bn, $2.13Bn, $1.08Bn, and $673 million, respectively. Total value added by
allied industries (indirect effects) amounted to $230 million, and value added by employee spending
was $1.23Bn. Indirect business taxes paid to governments by the horticulture industry and allied firms
were estimated at $462 million.
Total employment associated with the horticulture industry was over 192,000 jobs, including
158,000 jobs directly in the commercial horticulture sectors, plus an additional 5,000 jobs in the allied
supply businesses, and 25,000 jobs as a result of employee personal consumption expenditures.
Total employment associated with the horticultural production, service, retail, and trade sectors were
54,000, 64,000, 56,000, and 13,000 jobs, respectively. Total industry employment increased from
1997 by 13 percent, or 4.4 percent annually.








Table 7. Total economic impacts of the Florida horticulture
industry, 2000 and change from 1997
Total Percent Annual
Type/Sector Impact Change Total
2000 Impact 97-00
Output ($million)
Production* 3,476 10.1%
Landscape Services 3,395 6.5%
Retail 1,296 45.3%
Trade (floral imports) 997 4.6%
Total 9,164 10.7%
Value Added ($million)
Production* 2,518 10.8%
Landscape Services 2,130 0.1%
Retail 1,080 45.8%
Trade (floral imports) 673 4.5%
Total 6,401 8.7%
Labor Income ($million)
Production* 1,608 18.9%
Landscape Services 1,418 -4.5%
Retail 669 42.4%
Trade (floral imports) 424 4.1%
Total 4,118 7.8%
Indirect Business Taxes ($million)
Production* 90 18.8%
Landscape Services 94 7.7%
Retail 187 38.9%
Trade (floral imports) 91 3.5%
Total 462 17.6%
Employment (jobs)**
Production (nursery, sod) 54,288 5.9%
Landscape Services 64,282 0.9%
Retail 55,874 na
Trade (floral imports) 13,416 na
Total 187,859 4.4%
Production sector includes nursery, sod, cut flowers/foliage.
**Employment estimates based on survey results for direct
employment plus multiplier effects of export sales.


Regional Economic Impacts
Regional economic impacts of the Florida environmental horticulture industry are summarized
in Table 8 for six regions. Direct employment, as reported to the Florida Department of Labor, was
highest in the south-east Florida region (33,543), closely followed by the central-west (30,930), and
central-east (29,850) regions, then by the north-east (17,743), south-west (13,598) and north-west
(3,267). Total employment impacts were highest in the central-cast region (45,320), followed by the
southeast (40,597) and central-west (37,937). Total output impacts regionally were $2.27Bn in the
central-east region, $1.96Bn in the south-east, $1.53Bn in the central-west, $1.10Bn in the north-
east, $550Mn in the south-west, and $229Mn in the north-west. Note that these impacts do not
reflect the sod farms and cut flower/foliage production sectors or the floral import sector.








Table 8. Regional economic impacts of Florida nurseries, horticultural
retailers and landscaped services sectors, 2000


Region or County


Employme Sa
nt Impacts $mon
ob ($million)
(jobs)


Output
Impacts
($million)


Value
Added
Impacts
($million)


Labor
Income
Impacts
($million)


South-East Florida 40,597 2,025 1,963 1,303 842
Central-West Florida 37,937 2,213 1,530 1,131 724
Central-East Florida 45,320 1,982 2,265 1,540 996
North-East Florida 27,900 903 1,101 742 487
South-West Florida 13,187 806 550 409 262
North-West Florida 3,585 168 229 188 120


Impacts of Drought on the Florida Horticulture Industry
Drought and water use issues are of special concern in the horticulture industry.
During the past four years, many areas of Florida have experienced significantly below-normal
rainfall. Anecdotal evidence indicated that many horticulture businesses have suffered severely in
this situation due to limited availability of water for irrigation, water use restrictions, and loss of sales
resulting from lower demand. However, drought could potentially benefit some horticultural business
as a result of demand for replacement plants and water conserving equipment or supplies. As part of
this study, we attempted to document the economic impact by asking survey respondents whether
the drought during the last 4 years had affected their sales or purchases of plants. A majority of
nurseries, landscape firms, and institutional consumers indicated that indeed their sales or purchases
had been affected by the drought, while somewhat less than 50 percent of retailers and households
expressed this opinion (Table 9). Among those respondents who indicated that they had been
affected, over three-quarters said that their sales or purchases were decreased rather than
increased. Moreover, for every group, the magnitude of change was greater in the negative direction
than in the positive direction. The percentage change in sales or purchases was multiplied against the
estimated total sales or purchases for each respondent, then expanded and summed together to
reflect the net change in total industry sales or purchases. The net impact for all groups was negative,
except for retailers. Nurseries and landscapers were estimated to have suffered a net decrease in
sales of $61Mn and $184Mn, respectively, while households and institutions reduced purchases by
$109Mn and $3Mn. The retail sector had a somewhat different outcome, with a net increase in sales
of $80million, due mainly to sales growth reported by large volume retail chains.

Table 9. Impacts of drought on Florida sales and purchases of horticultural products and
services, 2000
Response/Measure Nurseries Retailers Landscapers Institutions Households
Percent of respondents with sales or purchases of plants affected by drought during the last
4 years


"Yes" (affected by drought) 56.1% 41.1%
"No" (not affected by drought) 41.3% 54.7%
Percent respondents with sales or purchases increased or
Increased 7.0% 15.3%
Decreased 88.2% 79.6%
Average percentage change in sales or purchases
Increased 22.0% 20.8%
Decreased 24.3% 23.5%
Estimated total change in sales or purchases ($millions)
Increased 35.4 234.0
Decreased 96.8 154.4
Net Difference (61.3) 79.5


56.0%
42.3%
decreased
13.8%
81.7%

14.3%
33.1%

15.36
199.1
(183.8)


58.4%
39.6%

15.5%
78.8%

43.5%
53.8%

1.4
4.1
(2.8)


44.9%
52.3%

17.4%
77.1%

49.3%
63.0%

96.0
204.7
(108.7)








The net change in sales of horticultural products due to drought and their economic impacts
on the horticulture industry were also estimated for the five Water Management Districts of Florida,
which have varying water supply conditions and policies for water use restrictions (Table 10). The St.
Johns, South Florida, and Southwest Florida Water Management Districts all had horticulture industry
sales exceeding $2Bn. The net change in horticulture industry sales was negative in all of the Water
Management Districts. The largest change in sales due to drought occurred in the Southwest Florida
Water Management Districts, with a loss of $155 million, which represented approximately 7 percent
of total industry sales. Horticulture businesses in the South Florida Water Management District and
St. Johns River Water Management District also experienced significant losses in the nursery and
landscape sectors, but these were partly offset by positive net changes for retailers.

Table 10. Net change in sales of horticultural products and services due to drought, and
economic impacts in the Florida Water Management Districts, 2000


Water Management
District


Net Change in Sales ($million)

Nurseries Landscape Retailers All Sectors
Services


Direct
Employment
Impacts
(jobs)


Direct Value
Added
Impacts
($million)


Northwest -1.3 na -2.1 -3.4 -34 -1.7
Suwannee River -2.3 na -0.6 -2.9 -42 -2.3
St. Johns River -8.1 -47.2 14.4 -40.9 -1,727 -33.1
Southwest -18.6 -69.0 -67.4 -155.0 -3,183 -77.6
South -33.7 -59.3 116.5 23.5 -1,957 -37.8
All -64.0 -175.5 60.8 -178.6 -6,944 -152.4