COVERSTORY “You have about five consecutive years
“You have about five consecutive years of growth, depending on which market you’re in, before we move through this next major downturn,” - Taylor St. Germain, an economist with ITR Economics
He says even with the implementation of AI, labor costs will rise. ITR Economics has been predicting a second Great Depression in the 2030s and St. Germain encourages companies to put themselves in a position to be aggressive during these years rather than reactive. He cautions businesses not to be in a high- debt situation closer to that downturn. “If there are major investments or expan- sion, things that you need to do to prepare for growth, we’re suggesting that you do those things now or as soon as possible,” St. Germain says. “If you make investments now, you have a four- to five-year runway of growth to really see a return on these investments, see your business grow and have the time to recoup your cash and put yourself in a low leverage, low debt situation going into the 2030s.” St. Germain says those who don’t have a lot of debt and have cash to deploy during the 2030s will be able to take advantage of some of the downturn. He also advises owners to understand their leading indicators. “Understand how you’re going to be moving through these cycles based on your leading indicators so that you’re able to prepare well in advance of any accelerat- ing, slowing, or contraction that you might see out there in the markets,” St. Germain says.
St. Germain encourages diversifying and moving into other spaces.
KEY TAKEAWAYS
As artificial intelligence evolves, it will become essential for making land- scape companies more efficient.
Growth is expected in 2025-2026, emphasizing the need for strategic investments now. Land- scape companies must prepare for rising labor
costs and long-term inflation while minimiz- ing debt.
Increasing tempera- tures and unpredictable weather patterns will am- plify natural disasters like hurricanes and wildfires. Landscape companies should think long-term for plant success.
22 The Edge //January/February 2025
of growth, depending on which market you’re in, before we move through this next major downturn,” St. Germain says. “I think you really need to spend a lot more time thinking about those five-year forecasts and understanding how are we going to take on growth?”
REGULATORY IMPACTS While St. Germain says the election results don’t change their forecast for the economy, they are watching some legislation closely, especially with the Republicans taking the presidency, House and Senate. It’s likely to see more legislation passed because of the synchrony of one party having control. Andrew Bray, NALP senior vice president
of government relations and membership, says one major legislative issue the govern- ment affairs team is monitoring is the sta- tus of the H-2B program. He says although Trump distanced himself from the Project 2025 document during his campaign, many of the individuals involved in writing the document have been placed in key positions in his administration. “We’d be naive to think that some of the things in Project 2025 aren’t true,” Bray says. “In Project 2025, there’s a section on H-2B visas, and it says do not incur your discretionary authority to release additional visas. That’s called the supplemental visa cap, which we have been getting for the last six years.” Additionally, Project 2025 also says it
plans to phase out H-2B entirely by 2030. Bray says the president cannot phase out H-2B by himself; that would take an act of Congress. However, Trump’s appointed deputy chief of staff for policy opposes the H-2B program and will likely try to push President Trump to not exert discretionary authority to release additional H-2B visas if given the option. “We have people inside of the Trump administration that are against the use of the program, and so this is going to be a very difficult couple of years,” Bray says. In light of these concerns, Bray says the NALP government affairs team is push- ing for the discretionary visa language changed from ‘may’ to ‘shall.’ As for pesticides, Bray says with the Republican-controlled House and Senate, he is optimistic about seeing the Farm Bill passed. Also, he says an EPA under Trump will be more receptive to industry concerns and how products are used. “He is going to be very good at reducing regulatory burdens, and he is going to
actually look at some things that hap- pened over the last year or so that could be detrimental to our industry; he’s going to try to reverse them,” Bray says. The only issue Bray foresees is if the EPA slows down and doesn’t do its required registration review of various pesticides. If this occurs, activists will sue the EPA and the courts could decide that a pesticide is no longer legal to use in the U.S. One of Trump’s main priorities will be tax
cuts, such as reducing the corporate tax rate from 21% to 15%. “He’s going to do things that basically
help large corporations and large spend- ers,” Bray says. “He’s also going to do tax cuts that help really low earners.” Bray says it is unlikely Trump will approve
of any green industry tax credits, but he will also not aggressively push for the gas-to- electric transition. Bray expects many of these changes to
take effect by the end of 2025 because, by midterms, he will begin to lose political capital, as more moderate Republicans who need to run for re-election will have to separate themselves from him or face a primary in early 2026. “If things are going really good and the
economy’s booming and there’s been no global crisis, the Republicans will probably hold on to everything,” Bray says. However, with their slight majority, Bray
expects the House will return to the Demo- crats in the mid-terms. Bray notes that blue states like California, New Jersey, and New York will try to roll out progressive policies at a local level in retaliation to Trump’s federal changes. “This state legislative cycle is going to be the most difficult one we have ever operat- ed it, at least in those blue states,” Bray says. Bray predicts that in the second half of
his presidency, Trump may pivot to the middle after achieving his key priorities. “I’m hoping that he realizes that the best
thing for everybody is to try to soften the tone and try to bring people back together instead of dividing us,” Bray says. “I’m just hopefully optimistic that he will do that towards the end of his term.”
ADAPTING TO THE ENVIRONMENT Even though the weather is out of your control, it is necessary to be aware of the impact of warming temperatures across the globe, which has been increasing at an average rate of 0.11 degrees Fahrenheit per decade since the Industrial Revolution. “There’s every reason to believe that we’re going to continue to put more
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