Landscape contractors are expressing positive sentiments about growing revenues and purchasing equipment through the remainder of 2017 and into early 2018, according to Seaport Global Securities’ most recent quarterly survey of landscape contractors.

“We view the results as a positive for companies we cover that serve the landscaping and lawn & garden industry,” says Michael Shlisky, SGS analyst who conducted the study. “To a lesser extent, our survey is also positive for companies we cover with turf care businesses.”

“Overall, we believe our survey underscores the improving financial position at many landscapers, as well as the potential for further growth in equipment sales to this industry next year,” Shlisky says.

A summary of the survey results indicates:

• Purchasing Intentions: Approximately 32% of the respondents plan an increase in equipment purchases in late 2017 and early 2018, while just 8% intend to curtail their purchases.

• 2017 Revenue Outlook: 36% of survey respondents expect to see revenue growth of 10% or more in 2017. Approximately 24% expect to see revenue growth of 5-10% this year, while 16% expect growth of 2-5%. 

• 2018 Revenue Outlook: First look at next year’s prospects is positive. Roughly 32% expect increases of 10% or more in 2018, with an additional 32% expecting an increase of 5-10% and another 32% expecting an increase of 2-5%. Just 4% expect a flat year or a decline in 2018. “We believe this is a favorable backdrop for power equipment purchases, at least to start the year,” says Shlisky.

• Improving Sentiments: Among the respondents to the survey, 56% said they feel better about the business today vs. 35% 3 months ago. The remaining 44% of respondents reported no change in sentiment. 

Shlisky adds, “Much like our surveys in prior quarters, the two main drivers of equipment budgets over the next several months are business growth (56% of respondents cited this as a reason for capex) and regular replacement (48% cited this as a reason).”

Used Small Tractors: ‘Smaller = Hotter’

During July and August 2017, the most clicked on sub category of farm equipment at www.MachineryPete.com was under 40 horsepower Kubota tractors. According to Greg Peterson, founder of the used farm equipment website, “The trend of smaller equals hotter holds true in the used farm equipment world with more buyer demand, stronger auction pricing and dealer sales of good condition smaller horsepower used tractors and equipment.”

Machinery Pete’s Quarterly Used Values Index for the third quarter of 2017 indicates increasing buyer-demand search traffic on the website for smaller equipment.

For tractors under 100 horsepower, Peterson comments that “Strength in the general economy (low unemployment, rising 401K balances) are fueling buying interest for new and used tractors in this lower horsepower range from hobby farm owners.”

Regarding garden tractors, including zero turns, he says, “The summer months saw active buying conditions. Search traffic was up 163.1% vs. the third quarter of 2016. Dealers we’ve talked with are reporting solid new and used buying activity with garden tractors.”

Peterson also notes increasing interest in ATVs. “Auction prices are holding steady for the most part; up just slightly. Increasing buyer demand is noted in strongly increasing search traffic.”

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