1996 OHIO NURSERY INDUSTRY SURVEY

FINAL REPORT

Tim Rhodus and James Hoskins
Department of Horticulture and Crop Science
The Ohio State University
June, 1997

SUMMARY OF SURVEY RESULTS

A sales survey of licensed nursery stock dealers and producers in Ohio was conducted to document the economic importance of the nursery industry in Ohio and measure changes in the industry from previous studies conducted for 1988 and 1992. This project was undertaken with the support of the Ohio Nursery and Landscape Association and the Ohio Department of Agriculture. According to the 1996 ODA licensee list, the number of licensed dealers was 4,119 and the number of licensed producers was 1,505. For efficiency reasons, a random sample of 4,000 names was drawn from the total set of license holders. This resulted in 2,932 dealers and 1,068 producers being contacted for this study. A pre-survey announcement postcard was mailed in early January, 1997. A week later survey questionnaires were mailed, with a follow-up postcard reminder mailed in two weeks. Surveys were tracked and data tabulated as questionnaires were received from respondents. Finally, a second questionnaire was mailed to all non-respondents in mid-February, 1997. These survey techniques were consistent with the 1988 and 1992 studies.

A total of 386 useable questionnaires were returned by nursery stock dealers for a study response rate of 14%. A total of 354 useable questionnaires were returned by nursery stock producers for a study response rate of 34%. From respondents who indicated they had gone out of business before 1996, civic groups who indicated they held certification for non-profit reasons, governmental entities such as Soil and Water Conservation Districts, and from undeliverable mail returned by the post office the final number of dealers and producers comprising the statewide population was adjusted downward by 216 firms.

Statistical analysis of survey responses was conducted at The Ohio State University, Department of Horticulture and Crop Science, and provides the basis for the information presented in this report. Information from survey respondents is presented separately for dealers and producers. Responding firms also were classified according to their sales specialization. Estimates of statewide levels for gross sales, payroll, number of employees, taxes paid, and employee demographics, based on sales specialization were also determined. The information in this report follows similar studies conducted by The Ohio State University for the years 1988 and 1992. Comparison of results between the current study and the previous two time frames are also presented in this report. The present study expands on the previous studies with the inclusion of three new questions. Firms were asked about starting wages for new employees hired during 1996, the number of additional employees they would have hired during 1996, if they could have found qualified employees, and a question on employee demographics.

Similar to the 1992 nursery industry study, the 1996 survey contained an issues section. The 1992 survey sampled license holders' attitudes relating to changes in the business environment and specific programs at Ohio State University targeted at the nursery industry. The issues section of the current survey presented a series of question about usage of Internet technology and interest in Internet training programs. Results of these questions are presented at the end of this report.

Overall, the nursery industry in Ohio generated an estimated gross sales revenue of $1.96 billion in 1996. This figure represents an increase of 22.2% over the total of $1.6 billion for 1992, an average annual growth of 5.6% between 1992 and 1996.

Of the total industry estimate, $568.3 million was generated by Retail Garden Center sales, $585.1 million from Landscape Construction and Installation, $360.5 million from Landscape Maintenance, and $316.0 million from Wholesale sales. All other sales totaled $129.8 million. Total sales by firms holding a dealer's license was $1.4 billion in 1996, an increase of 28.1% over 1992. Total sales by firms holding a producer's license was $561.5 million, an increase of 9.7% over 1992.

In 1996, the nursery industry contributed an estimated $659.7 million to Ohio's economy through employee payroll. Nursery stock dealers and producers provided statewide employment opportunities for an estimated 31,651 year-round full-time workers, 17,437 year-round part-time workers, and 41,548 seasonal workers.

Finding enough qualified employees for the industry proved difficult in 1996. Firms indicated that an additional 10,681 full-time employees and another 11,053 part-time and 17,064 seasonal workers would have been hired, if available. As a means of attractive additional workers, average starting wages for full-time workers were increased 7% by dealers and 6% by producers.

Survey Respondents

A breakdown of dealer and producer license holder survey respondents by county of residence is presented in Tables 1a and 1b. Based upon survey responses, the following thirteen counties accounted for 56.7% of the nursery stock dealers in Ohio: Butler, Clermont, Cuyahoga, Franklin, Geauga, Hamilton, Lorain, Medina, Montgomery, Stark, Summit, Warren, and Wayne. Each of these 13 counties' survey respondents comprised 2.5% or greater of the total sample.

Based upon survey responses, the following 13 counties accounted for 50.4% of the nursery stock producers in Ohio: Clark, Franklin, Hamilton, Lake, Lorain, Lucas, Medina, Montgomery, Portage, Stark, Summit, Trumbull, and Warren. Each of these 13 counties' survey respondents comprised 2.5% or greater of the total sample.

Table 1a. Survey Respondents By County - Dealers

DEALERS	Frequency	Percent of Sample		Frequency	Percent of Sample		Frequency	Percent of Sample
County			County			County
Adams	1	0.3%	Hamilton	31	8.0%	Noble	0	0.0%
Allen	5	1.3%	Hancock	2	0.5%	Ottawa	0	0.0%
Ashland	1	0.3%	Hardin	3	0.8%	Paulding	2	0.5%
Ashtabula	5	1.3%	Harrison	1	0.3%	Perry	1	0.3%
Athens	2	0.5%	Henry	0	0.0%	Pickaway	1	0.3%
Auglaize	2	0.5%	Highland	0	0.0%	Pike	0	0.0%
Belmont	0	0.0%	Hocking	0	0.0%	Portage	3	0.8%
Brown	0	0.0%	Holmes	0	0.0%	Preble	0	0.0%
Butler	10	2.6%	Huron	2	0.5%	Putnam	3	0.8%
Carroll	1	0.3%	Jackson	0	0.0%	Richland	3	0.8%
Champaign	4	1.0%	Jefferson	1	0.3%	Ross	1	0.3%
Clark	9	2.3%	Knox	0	0.0%	Sandusky	2	0.5%
Clermont	10	2.6%	Lake	7	1.8%	Scioto	2	0.5%
Clinton	3	0.8%	Lawrence	0	0.0%	Seneca	3	0.8%
Columbiana	4	1.0%	Licking	3	0.8%	Shelby	3	0.8%
Coshocton	0	0.0%	Logan	3	0.8%	Stark	11	2.8%
Crawford	1	0.3%	Lorain	22	5.7%	Summit	10	2.6%
Cuyahoga	42	10.9%	Lucas	6	1.6%	Trumbull	7	1.8%
Darke	2	0.5%	Madison	1	0.3%	Tuscarawas	6	1.6%
Defiance	2	0.5%	Mahoning	4	1.0%	Union	5	1.3%
Delaware	7	1.8%	Harion	4	1.0%	Van Wert	0	0.0%
Erie	3	0.8%	Medina	13	3.4%	Vinton	0	0.0%
Fairfield	4	1.0%	Meigs	3	0.8%	Warren	10	2.6%
Fayette	0	0.0%	Mercer	3	0.8%	Washington	4	1.0%
Franklin	27	7.0%	Miami	4	1.0%	Wayne	11	2.8%
Fulton	2	0.5%	Monroe	1	0.3%	Williams	2	0.5%
Gallia	1	0.3%	Montgomery	12	3.1%	Wood	0	0.0%
Geauga	10	2.6%	Morgan	0	0.0%	Wyandotte	0	0.0%
Greene	7	1.8%	Morrow	0	0.0%	Other	4	1.0%
Guernsey	0	0.0%	Muskingum	1	0.3%	TOTAL	386	100%

Table 1b. Survey Respondents By County - Producers

PRODUCER	Frequency	Percent of Sample		Frequency	Percent of Sample		Frequency	Percent of Sample
County			County			County
Adams	1	0.3%	Hamilton	12	3.4%	Noble	0	0.0%
Allen	2	0.6%	Hancock	0	0.0%	Ottawa	1	0.3%
Ashland	3	0.8%	Hardin	0	0.0%	Paulding	0	0.0%
Ashtabula	8	2.3%	Harrison	1	0.3%	Perry	2	0.6%
Athens	4	1.1%	Henry	1	0.3%	Pickaway	4	1.1%
Auglaize	1	0.3%	Highland	4	1.1%	Pike	0	0.0%
Belmont	0	0.0%	Hocking	2	0.6%	Portage	14	4.0%
Brown	0	0.0%	Holmes	2	0.6%	Preble	0	0.0%
Butler	6	1.7%	Huron	1	0.3%	Putnam	1	0.3%
Carroll	6	1.7%	Jackson	2	0.6%	Richland	5	1.4%
Champaign	3	0.8%	Jefferson	2	0.6%	Ross	2	0.6%
Clark	10	2.8%	Knox	2	0.6%	Sandusky	3	0.8%
Clermont	3	0.8%	Lake	33	9.3%	Scioto	1	0.3%
Clinton	0	0.0%	Lawrence	0	0.0%	Seneca	1	0.3%
Columbiana	5	1.4%	Licking	6	1.7%	Shelby	1	0.3%
Coshocton	5	1.4%	Logan	0	0.0%	Stark	22	6.2%
Crawford	2	0.6%	Lorain	15	4.2%	Summit	10	2.8%
Cuyahoga	5	1.4%	Lucas	9	2.5%	Trumbull	10	2.8%
Darke	1	0.3%	Madison	1	0.3%	Tuscarawas	3	0.8%
Defiance	1	0.3%	Mahoning	7	2.0%	Union	2	0.6%
Delaware	2	0.6%	Harion	1	0.3%	Van Wert	0	0.0%
Erie	3	0.8%	Medina	13	3.7%	Vinton	0	0.0%
Fairfield	2	0.6%	Meigs	3	0.8%	Warren	11	3.1%
Fayette	0	0.0%	Mercer	0	0.0%	Washington	3	0.8%
Franklin	11	3.1%	Miami	6	1.7%	Wayne	8	2.3%
Fulton	2	0.6%	Monroe	1	0.3%	Williams	1	0.3%
Gallia	0	0.0%	Montgomery	9	2.5%	Wood	1	0.3%
Geauga	6	1.7%	Morgan	2	0.6%	Wyandotte	0	0.0%
Greene	6	1.7%	Morrow	3	0.8%	Other	4	1.1%
Guernsey	2	0.6%	Muskingum	6	1.7%	TOTAL	354	100.0%

VALUE OF NURSERY STOCK SALES

Estimated value of overall sales by certified nursery stock dealers and producers in Ohio was $1.96 billion for 1996. Of this total, approximately $1.4 billion was from certified dealers and $561.5 million from certified producers, Table 2. Dealer sales values were determined by multiplying the average level of gross sales as reported by survey respondents for each category of nursery sales by a factor of 10.1968 (3,936 certified dealers ÷ 386 surveys providing sales information). Estimated value of overall sales for nursery stock producers was determined by multiplying the average level of gross sales as reported by survey respondents for each category of nursery sales by a factor of 4.1581 (1,472 certified producers ÷ 354 surveys providing sales information).

Table 2. Total Reported Sales -1996

Category	Dealers	Producers	Combined
Retail Garden Center	$442,558,000	$125,702,000	$568,260,000
Landscape Const/Instal.	437,379,000	147,735,000	585,115,000
Landscape Maintenance	334,618,000	25,848,000	360,466,000
Wholesale	104,852,000	211,120,000	315,972,000
Other	78,714,000	51,071,000	129,786,000
Total	$1,398,121,000	$561,477,000	$1,959,598,000

During 1996, the sale of Landscape services in Ohio totaled $945.6 million (combined total for Construction/Installation and Landscape Maintenance), almost twice the figure of $494.3 million for 1992. Garden Center sales totaled $568.2 million, and Wholesale sales (including sales within and outside of Ohio) totaled $316.0 million.

Growth in sales between 1992 and 1996 was determined by comparing results of the 1992 Ohio Nursery Industry Survey to the results of this survey. Overall, there was an increase of $356.3 million, an increase of 22.2% over 1992 (Table 3). This compares to the previous four year period (1988-1992) where growth was $352.7 million. The growth in sales between 1992 and 1996 period averaged 5.6% per year. However, growth in sales did not occur uniformly across all segments of the industry. Retail garden center sales increased by an average of 7.6% per year, Landscape Construction/Installation sales increased by an average 19.8% per year, and Landscape Maintenance sales increased by 28.6%. Estimated Wholesale sales were observed to decrease between 1992 and 1996 by $35.1 million, or 10%.

Table 3. Growth in (Nursery stock) Sales Between 1988 and 1996

Category	1996 Total	1992 Total	1988 Total	Change 92-96	Annual Growth
Retail Garden Center	$568,260,000	$435,513,000	$357,371,000	30.5%	7.6%
Landscape Const/Instal.	585,115,000	326,256,000	366,140,000	79.3%	19.8%
Landscape Maintenance	360,466,000	168,005,000	126,705,000	114.6%	28.7%
Wholesale Sales	315,972,000	351,100,000	324,928,000	-10.0%	-2.5%
Other	129,786,000	322,457,000	75,431,000	-59.8%	-15.0%
Total	$1,959,598,000	$1,603,331,000	$1,250,575,000	22.2%	5.6%

Similarly, total amount of "Other" sales for licensed dealers and producers declined by 60% between 1992 and 1996. The increase noted four years ago in the 1992 nursery industry study within the "Other" category was then attributed to the first-time application of a more rigorous survey methodology that increased survey response rate. In fact, the 1992 response rate among dealers was 32%, up from 12% for the 1988 survey. However, for the current survey, the response rate among dealers dropped to 14%, in spite of the same methodology employed as in 1992. Although we have no way of knowing the reason for the response rate drop among dealer license holders (short of performing a post-test survey of non-respondents), we do speculate that license-holding dealers who may be marginally involved in nursery sales made a first-time effort in 1992 to respond to the survey, but did not consider a follow-up effort four years later of benefit to them.

In spite of the drop-off in dealer survey participation for 1996, a small number (less than 10) of very large firms did participate in the 1996 study. However, in some of these cases 95% or more of their sales were derived from non-nursery industry sales. Our strategy for dealing with several of these large firms who reported high percentages of "other" sales was to drop them from the calculation of the statewide average sales value and then add their sales values back into the statewide estimate. Thus, the "other" sales category attempts to maintain the integrity of the survey sales data as primarily a reflection of that business generated by license holders involved in the nursery industry. As a result, the average of "other" sales reasonably includes income from a Landscape Maintenance firm involved in snow plowing but not, for example, the $95,000,000 in sales of a retail home supply center.

Sales by firm type was estimated by categorizing firms by their primary source of revenue. Firms indicating that 50% or more of their gross sales were generated from a single sales category were classified as specializing in that type of business, otherwise they were considered as "Mixed Enterprise" firms. Gross sales for 1996 and 1992 by firm type are presented in Table 4. As indicated above, growth in sales between 1992 and 1996 did not occur evenly across all segments of the industry. Growth in sales for all segments was most pronounced in the area of landscape services. Estimated sales for firms specializing in Landscape Maintenance grew by 178% over the past four years. Similarly, sales for firms specializing in Landscape Construction and Installation grew by 94% over the past four years. However, wholesale sales grew only 2% in four years.

Table 4. Total Sales by Firm Type ($1,000) - 1996 and 1992

Category	1996	1992	Percent Change 92 - 96	Annual Growth
Retail Garden Center	$405,844	$291,211	39.4%	9.8%
Landscape Const/Instal.	488,019	251,921	93.7%	23.4%
Landscape Maintenance	296,533	106,756	177.8%	44.4%
Wholesale	264,409	259,531	1.9%	0.5%
Other	266,833	430,168	-38.0%	-9.5%
Mixed Enterprise	237,960	192,117	23.9%	6.0%
Total	$1,959,598	$1,610,670	21.7%	5.4%

NURSERY INDUSTRY EMPLOYMENT

Survey respondents were asked to identify their total labor payroll for 1996. Total payroll for firms classified according to their sales specialization is presented in Table 6. Statewide estimate of the 1996 payroll for the nursery industry was $659.7 million. This figure represents an increase over 1992 of 31.6%. All industry segments increased their payroll between 1992 and 1996 with the exception of a moderate decline by Wholesale firms and those classified as "Other." The largest increase in payroll was observed for landscape maintenance firms. Their estimated statewide payroll increased from $35 million to $107 million, an increase of 202%.

Table 6. Total Payroll by Firm Type - 1996, 1992 and 1988

Category	1996 Total	1992 Total	1988 Total	Change 92-96
Retail Garden Center	$ 108,212,000	$ 100,053,000	$ 137,811,000	8.2%
Landscape Const/Instal.	189,607,000	97,022,000	91,763,000	95.4%
Landscape Maintenance	107,178,000	35,494,000	34,870,000	202.0%
Wholesale Sales	100,012,000	103,946,000	83,170,000	-3.8%
Other	47,852,000	94,550,000	17,359,000	-49.4%
Mixed Enterprise	74,738,000	71,842,000	84,325,000	4.0
Total	$ 659,740,000	$ 501,472,000	$ 571,640,000	31.6%

Total number of employees in the nursery industry was estimated at 90,636 for 1996, Table 7. This was up approximately 2% from 1992. Seasonal positions declined by 7.2%, while there were significant increases in part-time positions (28.5%) and moderate increases in the number of full-time positions (3.8%). This compares to the 1992 figures where the number of part-time positions was observed to decrease and the number of seasonal positions increased, relative to 1988. Overall, the number of positions in the nursery industry is at an all-time high of 90,636.

Table 7. Total Number of Employees in Nursery Industry - 1996, 1992 and 1988

Category	1996	1992	1988	Change (%) 92-96
Full-time	31,651	30,494	29,623	3.8%
Part-time	17,437	13,571	16,734	28.5%
Seasonal	41,548	44,772	37,503	-7.2%
Total	90,636	88,837	83,860	2.0%

Year-round full-time employees totaled 31,651 in 1996, Table 8. This was up 3.8% from 1992. The largest employer in the industry was Landscape Construction/Installation firms, followed by Wholesalers, and Retail Garden Centers. Growth in full-time employment between 1992 and 1996 was most significant for Landscape Maintenance firms, increasing by 97% over 1992. Retail Garden Centers, Wholesalers, and Mixed Enterprise firms hired fewer full-time employees in 1996 than in 1992.

Table 8. Number of Full-Time Employees by Firm Type - 1996, 1992 and 1988

Category	1996	1992	1988	Change (%) 92-96
Retail Garden Center	5,198	6,833	7,958	-23.9%
Landscape Const/Instal.	8,421	4,424	4,876	90.3%
Landscape Maintenance	4,478	2,274	2,270	96.9%
Wholesale	6,187	7,139	6,945	-13.3%
Other	3,550	6,249	3,279	-43.2%
Mixed Enterprise	3,361	3,574	4,294	-5.9%
Total	31,651	30,494	29,623	3.8%

Year-round part-time employees totaled 17,437 in 1996, Table 9. This is an increase of 28.5% from 1992, and moves the part-time employment figures above the baseline figure of 16,734 established in the 1988 survey. As observed in 1992, the largest employer of year-round part-time employees was Retail Garden Centers. Significant growth in part-time employment was noted for all firm types with the exception of the "Other" category which declined 32.7% from the 1992 survey figure.

Table 9. Number of Year-Round Part-Time Employees - 1996, 1992 and 1988

Category	1992	1992	1988	Change (%) 92-96
Retail Garden Center	3,911	3,372	6,542	16.0%
Landscape Const/Instal.	3,784	2,452	3,300	54.3%
Landscape Maintenance	2,561	1,613	1,539	58.8%
Wholesale	3,414	1,986	1,921	71.9%
Other	1,581	2,350	1,031	-32.7%
Mixed Enterprise	1,838	1,798	2,402	2.2%
Total	17,437	13,571	16,734	28.5%

Seasonal employees totaled 41,548 in 1992, Table 10. This figure is down 7.2% from 1992. Wholesale firm types exhibited the greatest decrease in seasonal employees, yet remained the largest sector employing seasonal workers. Landscape Maintenance firms showed the greatest increase from 1992. Combining landscape construction and maintenance, indicates there were an estimated 16, 489 positions for seasonal workers.

Table 10. Number of Seasonal Employees - 1996, 1992 and 1988

Category	1996	1992	1988	Change (%) 92-96
Retail Garden Center	7,412	7,348	8,468	0.9%
Landscape Const/Instal.	8,572	5,032	7,290	70.4%
Landscape Maintenance	7,917	2,799	3,343	182.9%
Wholesale	9,784	22,648	9,519	-56.8%
Other	2,943	3,839	1,770	-23.3%
Mixed Enterprise	4,336	3,107	7,122	39.6%
Total	41,548	44,772	37,503	-7.2%

Industry Needs for Additional Employees

As part of the 1996 Survey, additional questions regarding industry needs for additional employees, starting wages for 1996, and employee demographics were included for the first time. Regarding the need for additional employees: "How many additional employees would you have hired in 1996, if you could have found qualified individuals?" Results indicate that Ohio nursery stock dealers and producers would have hired an additional 38,798 employees, Table 16. These results are significant because they indicate the extent to which the nursery industry continues to expand and has need for additional qualified employees. The 10,681 additional full-time employees desired represents an increase of 38% over the current estimate of industry full-time employees. Increases in part-time employment opportunities of 11,053 workers represents an increase of 63% over the current estimate of industry part-time employees. Increases in seasonal employment opportunities of 17,064 workers represents an increase of 41% over the current estimate of industry seasonal employees.

Table 16. Additional Employees That Would Have Been Hired in 1996, if Available

Category	Full-time	Part-Time	Seasonal	Total
Retail Garden Center	1,592	2,337	3,186	7,115
Landscape Const/Instal.	2,767	2,915	4,149	9,831
Landscape Maintenance	2,442	1,684	2,603	6,729
Wholesale	1,831	1,899	4,458	8,188
Other	795	856	921	2,572
Mixed Enterprise	994	1,339	1,735	4,068
Total	10,681	11,053	17,064	38,798

Increases in Starting Wages for New Employees Hired in 1996

Another new question for 1996 was: "Did you increase the starting wage for new employees hired in 1996, relative to a year ago? Is so, please indicate how much?" Increases in starting wages were offered by a greater share of licensed dealers and the average amount of wage increase generally exceeded that offered by licensed producers, Table 17. Half of all licensed dealers increased their starting wages for full-time employees by an average of 7.0%, while only 36% of all licensed producers increased their starting wage for full-time employees by an average of 6.0%. Over half of all dealers (59%) and producers (51%) increased their starting wages in 1996 for seasonal workers.

Increased wage offers for full-time employees were greatest for Landscape Const/Instal. firms. They offered, on average, 8.7% (dealers) and 7.6% (producers) higher wages in 1996. Even greater increases were observed by Landscape Const/Instal. firms for part-time employees (9.1% and 10.3%). Licensed producers who specialized in retail garden center sales were also very aggressive in offering 8.1% higher wages for full-time workers and 10.2% higher wages for seasonal workers. Caution: survey participants were not asked to state the actual level of their starting wages. Therefore, a large percentage increase for one segment of the industry may result in the same actual wage level as observed in another.

Table 17. Increase in Starting Wage Over 1995 (%) - Full-time, Part-time, and Seasonal

Dealers
Category	Full-time		Part-time		Seasonal
	Percent of firms	Wage Incr.	Percent of firms	Wage Incr.	Percent of firms	Wage Incr.
Retail Garden Center	34.8%	5.6%	37.7%	5.4%	55.1%	3.8%
Landscape Const/Instal.	52.5%	8.7%	33.3%	9.1%	67.5%	7.7%
Landscape Maintenance	52.5%	6.1%	29.7%	5.2%	57.4%	5.5%
Wholesale	52.4%	5.7%	42.9%	5.0%	57.1%	5.7%
Other	63.3%	7.1%	63.3%	3.1%	43.3%	5.0%
Mixed Enterprise	52.6%	6.0%	31.6%	6.7%	60.5%	7.7%
Overall Average	50.1%	7.0%	35.9%	6.5%	59.4%	6.3%
Producers
Category