Landscapers braced for slowdown

A decline in commercial construction could hit landscapers and their suppliers next season.

Wavering confidence in the UK's economic future could have a severe knock-on effect for the landscaping sector as commercial developers report a drop in activity for the first time in more than four years.

The boom in building new offices, shopping centres and supermarkets looks set to slow, according to developers who registered a slump in November and December.

This could prove a worry for landscapers and growers relying on commercial contracts. Figures from property services firm Savills show a quarter of commercial developers reported a drop in activity in December, with a fifth noting a fall in November.

Savills' commercial research department head Mat Oakley said he did not believe a lot of major new commercial developments would start this year, and that could adversely affect the construction and landscaping industries in the next two or three years.

He said: "While the development market is seasonal and always slows at this time of year, it's very clear that falling commercial property value and the credit squeeze are damaging developers' expectations."

Oakley added that he believed the difficulty in raising finance for schemes had been a problem, but he thought it would ease over the first five months of this year.

Fears for the future are at the forefront for many landscapers as the biggest impact of a decline in commercial construction now will not be felt for some time.

Boningale managing director Tim Edwards said he was not worried by the state of the landscaping sector this season as the majority of schemes had already been financed. But he warned the real problem could come in two or three seasons' time.

"At the moment we're all very excited by how busy it is, and right now there seems to be no problem. But the concern is that poor results in the retail sector dent confidence in the people responsible for commissioning and financing new build," Edwards said.

"I hear anecdotally that it's much more difficult to finance a project now than it was six months ago.

"Landscaping happens at the very end of a project and it can take anything from a year to several years from a project being financed to it being landscaped so it's probably quite a long time frame before things start to bite. It has to be a concern that there might be a drop off at some point in the future."

Better news for home landscaping

While concerns abound about the impact of the downturn, industry experts predict it could be confined to commercial development, while the housing sector remains strong.

Although Britain's biggest house builder, Persimmon, has admitted its sales of new homes that have not yet been built have fallen by 14 per cent in the past year, figures from the National House Building Council show that last year was a relatively positive time in the housing market, with five per cent more new homes being built in the period of August to October 2007 compared with the previous year.

Pantiles Landscape Design general manager Brian Reece said the business will continue to exist for firms working on housing developments and could well improve, despite the bleak forecasts of a property market slump.

"I can see demand for home landscaping rise even more in the future and I think councils will start to contract out landscaping more too, which will help our sector grow," Reece explained.

"The gardening industry has always enjoyed the buffering effect of people cutting back on other things first, and the garden centre and landscape industry actually benefit for a while from credit crunches as people spend more time in their gardens rather than on holiday."

In addition, major landscaping work such as the Olympic Park and Thames Gateway projects are in the pipeline, with the Olympic Delivery Authority intensifying work on its 2.5sq km site, ready for construction in the summer.

The deadline for tenders to revamp the 40ha northern section of the Olympic Park was on 15 January and the successful landscaper will be involved in planting trees, creating wildlife habitats and allotments, and transforming the Olympic concourse into meadows and lawns after the 2012 Games.

A similar contract for the south of the park is expected to go out to tender later this year.

"There are certainly some fairly major projects coming along and they'll be taking serious volumes of plants which has got to be a good thing," Edwards said.

Association of Professional Landscapers chairman James Steele-Sargent agrees that such major work could boost the landscaping industry but says that it is unlikely to reach beyond the companies that won the contracts.

He predicts that the slide in commercial development might not necessarily prove serious for landscapers as there would still be work in maintaining and revamping gardens in existing sites, as well as opportunities to target new customers.

"The professional landscapers I've spoken to are quite flexible in the sense that if there isn't so much commercial work coming in they'll shift to domestic," said Steele-Sargent. "Most companies already have three to four months of work ahead of them so they've got a bit of lead time to change their customer base and deal with it gradually."

Diversifying and developing a wider range of potential customers could well be the way forward in weathering a storm, according to Land Management Services director Helen Neve. "We're keeping an eye on work that has kept us strong in the past, such as Heritage Lottery money," she said. "At the moment we're saying: 'What recession?' because we're as busy as ever.

"But my biggest anxiety is that we're talking ourselves into a recession. In the last recession we went down last and came out after everyone else."

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