Experts predict 2015 to be a prosperous year for the tree care industry
FEATURE PHOTO CREATED BY LIZ KIGHT. PHOTOS AND ILLUSTRATIONS BY MAKSIM KABAKOU, NASTCO, THOMAS QUACK/THINKSTOCK
You can get quite a good view from high above a bucket truck, but not good enough to see into the future.
The year 2015 will soon be upon us and there’s no telling exactly what it will hold for the tree industry. Predictions are possible, however, based on current trends and educated hunches.
Business looks to be strong in the coming year, says Mark Garvin, president of the Tree Care Industry Association.
“From what I’m hearing, many companies are booked three months out at this point, and that’s very good,” he explains of a key barometer used to gauge the strength of the industry.
That fact that tree care providers have lined up that much work during what is normally the slow part of the year portends well for 2015, Garvin notes.
While some areas of the country rebounded a few years back after the worst of the economic recession, others have been slower to respond. Now, business seems to be getting stronger everywhere, Garvin says.
7 Trends Expected in 2015
1. Going up and up and up. Overall, business expects to be better for the tree care industry as a whole in 2015. Companies are already booking jobs for the upcoming year – a good sign of things to come.
2. Keep searching for them. Manpower may still be tough to come by for some companies for several reasons. Employers are competing against one another for well-qualified employees.
3. Too many insects? Pests like the emerald ash borer, wreaking havoc on ash trees in the Midwest, is just one example of a growing trend of increased insect activity for the industry.
4. It costs how much? Get ready for some stickershock. Partly as a result of new emissions regulations, the price of heavy machinery may increase in 2015, especially the price of chippers.
5. Gas. please. Because of a higher cost of diesel chippers, a popular choice traditionally, companies may be purchasing more gasoline chippers to do the neccessary work.
6. Government Issues. Obamacare regulations and mandates are resulting in companies revising their health insurance offerings. Immigration and seasonal work visa issues are also topics to watch in 2015.
7. Technology is king. More companies are doing away with paper estimates and invoices and switching to instant transactions via email thanks to tablets and smartphones.
“I’m hearing about more bookings and longer waits even in places like Michigan and California, and those are some of the last places to come back after the housing crash,” he adds. “The news is more universally good now than it was last year.”
That’s the case at Preservation Tree in Dallas-Ft. Worth, Texas, according to General Manager and Certified Arborist A.J. Thibodeaux.
“We’re wrapping up a second straight year of increased revenue and increased calls,” Thibodeaux says. “Everything is going well, and I foresee that being the case next year. I don’t have any reason to believe at this time that it will change for the negative.”
He adds that he has had many recent conversations with others industry professionals and they share his bright outlook for the upcoming year.
Thibodeaux says his company’s biggest challenge in the past year – and one he thinks will continue – has simply been finding the manpower to complete the additional work that’s been coming in.
“The labor pool has not been kind to us,” Thibodeaux says bluntly. “I’m planning on adding crews in the next year, and I have new equipment on order for the additional crews. But finding workers for those crews is definitely a challenge right now.”
His gut feeling is that an upswing in construction is what’s making employees harder to come by in the tree care industry.
Garvin says that while reports of increased business are good, he’s also heard reports from companies having a harder time hiring employees to meet that demand.
“I think it’s a combination of a stronger economy, in general, and a crackdown on illegal immigration the last couple of years,” Garvin adds. “That has really made it difficult to find skilled climbers and grounds people. For a while, it was easy. But now factories and other industries are hiring again, so it’s becoming harder.”
The shortage of good workers has led to more “poaching” in the industry, Garvin observes.
“Most companies know who their five or six competitors are in town, and it’s not hard to find those employees if you want to,” he says.
The coming year is likely to feature more of this competition for qualified workers, Garvin notes, with the related effect that companies will likely have to pay more for labor.
“Business may be good, but there’s been a real pressure put on wages lately,” Garvin adds.
One other way that companies will look to find new employees is by buying up other companies.
“The best way to come up with 30 skilled employees is to buy a company that has 30 skilled employees,” Garvin states. He sees more such consolidation in the tree care industry in the coming year as large national and regional companies purchase smaller companies that have desirable aspects such as solid and established bases of labor, strong repeat business and long-term commercial contracts.
Caryl Schwaller, a certified arborist and president of the Indiana Arborist Association, hopes the industry will do more in the next year to recruit new workers.
“We offer educational programs that sometimes suffer from a lack of interest,” Schwaller says.
There is good news in terms of professionalism in the industry, though, as she reports that the Indiana Arborist Association hit a record-high number of members this year.
“I think that’s a very positive sign that people are recognizing the value of educational organizations and professional credentials,” Schwaller adds.
Schwaller’s own employer, Arbormetric Solutions, which handles tree management for utilities and government agencies around the country, has recently seen increased demand for its services.
“I’ve worked here for six years, and we’ve grown every one of those years,” Schwaller says. “We are actively recruiting, even at the high school level, trying to find qualified people who will consider arboriculture for a career.”
Companies are increasingly relying on technology, like smartphones and tablets, to bring more efficiency in the field.
Next year is likely to come with sticker-shock for those in the tree care business, Garvin predicts.
“People are about to pay a lot more for their chippers,” he says, noting the impact of the latest Tier 4 emissions regulations that now impact many diesel engines. “There was a grace period, and chipper manufacturers were able to sell enough Tier 3 models to keep customers going. But now there are about to be some major price hikes on chippers.”
While diesel has traditionally been the power source of choice in chippers, Garvin hypothesizes that 2015 may see more gasoline chippers purchased because of the higher cost of diesel units.
In addition, there are other areas where lawmakers and rulemakers will likely impact the industry.
“I think people are waiting to see what happens politically,” Garvin says. “A lot of our larger members, especially, are looking at Obamacare and the mandates in a very nervous way.”
Even those smaller companies that won’t be required to offer health insurance may suddenly be competing for employees with companies that will offer health insurance, “and, one way or the other, it’s going to change the landscape of the industry,” Garvin explains.
Another key area that tree care companies will be watching in the coming year has to do with immigration and the availability of seasonal work visas, which have become increasingly difficult to acquire in recent years.
“There have been a lot of new regulations, and it has gotten much, much more difficult to get an H2-B visa in our industry, and more expensive,” Garvin says. “Couple that with new E-Verify rules and the crackdowns at the border, and labor has gotten more difficult to find.”
Regulations that stipulate how frequently trees are managed in utility right-of-ways, as well as how the work is performed, are likely to continue to drive demand for additional labor in this segment of the industry, Schwaller predicts.
“The utility side is growing by leaps and bounds,” Schwaller adds. “Here in Indiana there are now requirements for notifications. You can’t just go clean out a tree line around a power line without intensive customer relations [with neighbors and neighborhoods]. And that’s only going to continue to drive the need for qualified people who understand trees and power lines and who understand technology, which is necessary to show proof that you’ve notified customers.”
Tree care may not be viewed as the ultimate high-tech industry, but that reputation may be changing.
“More and more companies are going to give instant estimates,” Garvin says. “It used to be they would fill out a carbon slip saying, for example, that pruning would be done on a certain tree. Increasingly, companies are able to email those estimates to clients right from the front yard.”
That’s the case at Preservation Tree, where Thibodeaux estimates that roughly 80 percent of its proposals are delivered wirelessly via email.
And more technology is coming.
“Right now, we’re doing away with paperwork orders that are sent out in the field with our crews every day, and switching to electronic work orders that they access via mobile devices,” Thibodeaux says.
“Our crews are actually going to be clocking in and out for the day, and clocking on and off jobs during the course of the day with a smartphone …. And the next step for us is to put printers in our salespeople’s trucks. So they’ll be able to create very descriptive proposals in the field, on the property, using a tablet and print it right there in their trucks.”
Severe weather events mean more business for tree care companies.
We can’t yet control the weather, but we can prepare for it. And that’s a fact that can benefit tree care professionals.
“One of the things that has been a big plus for us has been the recent instability in our weather patterns,” Thibodeaux says. “I heard someone say that weather really isn’t a pattern anymore, it’s just extremes.”
As extreme weather events occur, and the general public sees a difference between how their trees fared versus those in their neighborhood that had been pruned, tree care companies are likely to see increased demand for pruning services, Thibodeaux says.
“[After a severe weather event] you can definitely see a significant difference in the extent of trees that are unmaintained versus those that are maintained,” Thibodeaux says. “We’re getting a lot of [post-severe weather event] calls for maintenance prunings to reduce the risk of failures in the tree in the future.”
Nature is also impacting businesses in some positive ways.
Schwaller says many parts of the Midwest are facing a potentially huge insect issue that will continue to shape the tree care business there in 2015, and beyond.
“Emerald ash borer is terrible for the trees, and I’m crying over the loss of the trees, but for the industry it has created a real boom,” Schwaller says.
And the insect is spreading, so tree care providers in surrounding regions of the country should prepare now for what might be coming their way, Schwaller advises.
Tree Services magazine’s Patrick White is a freelance writer and editor who has covered every aspect of the green industry in the past 15 years.