Nursery/Greenhouse

Economic concerns grow

While 2023 has been a strong year, the industry is increasingly concerned that a weakening economy and housing market could lower 2024 sales. Rising delinquency rates on consumer loans and a falling savings rate suggest many consumers are financially stressed. Housing data is mixed, and while single-family home starts remain relatively strong, it is unclear how long this can last given persistently high interest rates. Further, existing home sales, an important source of nursery-greenhouse product demand, are falling. See the Quarterly Economic Update for more information on the economy and interest rates. Despite these headwinds, growers are generally well positioned for a downturn.

University of Michigan Consumer Sentiment Index

Source: University of Michigan

Consumer sentiment has gradually improved since mid-2022 and this may be supporting plant sales.

Plant growth strong

Nursery-greenhouse plants benefited from warm, sunny weather in March. A strong start to the growing season widens the timeframe for both plant growth and retail sales; however, it increases the risk of frost damage if cold weather returns.

Rising prices offset input costs

Input costs continue to rise across all categories, especially labor (see Crop Inputs Snapshot for more information). However, producers have been able to increase prices proportionally without experiencing pullback in consumer demand.

Existing home sales increase

Existing home sales have started to rebound (see chart below), suggesting strength in the housing market despite persistently high interest rates. Existing home sales are an important driver of nursery-plant sales.

Existing Home Sales and Price Index

Source: National Association of Realtors. Standard and Poor CoreLogic.

Existing home prices have started to flatten, potentially driving sales.