Landscape Architectural Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,900 landscape architectural services in the US plan and design the development of land areas related to private homes, businesses, recreational facilities, campuses, parks, recreational facilities, and other open spaces. Firms may also offer urban planning, residential landscaping, project site master planning, and other consulting services.
Dependence on Construction Market and Economy
Demand for landscape architectural services is dependent on construction activity, which is cyclical and influenced by economic conditions.
Mitigating Climate Change
Public and private sector clients are demanding landscape architecture solutions that address climate change.
Industry size & Structure
The average landscape architectural service provider operates out of a single location, employs about 7 workers, and generates about $1.2 million annually.
- The landscape architectural services industry consists of about 4,800 firms that employ 33,000 workers and generate $5.8 billion annually.
- The industry is fragmented; the top 50 companies account for 20% of industry revenue. More than half of firms generate less than $1 million annually.
- Stantec is one of the largest architectural firms in the US and offers landscape architectural services. The biggest landscape architectural services companies typically have offices in multiple major metropolitan areas in the US, but none are truly national in scope.
- The largest client groups are private homeowners, architects, and cities/municipalities, according to the American Society of Landscape Architects (ASLA). The largest client group for firms with four employees or fewer is private homeowners. Large firms typically serve commercial and government clients.
Industry Forecast
Landscape Architectural Services Industry Growth
Recent Developments
Sep 6, 2024 - Developers Pull Back on Apartment Projects
- High interest rates have increased the costs for new multifamily construction and reduced property values, prompting some developers to halt or delay projects, according to The Wall Street Journal. Multifamily housing starts involving five or more units fell 21.8% in July compared to July 2023 and were down 41% from their April 2022 peak. The drop in starts follows a boom in apartment building that began during the pandemic. This year, about 610,000 apartment units are expected to come online, the most in any year since the 1980s, according to data firm CoStar. However, as financing new projects has become costlier, CoStar expects new apartment supplies to slip to fewer than 350,000 units in 2025 and 275,000 in 2026. The influx of new apartment building has created an oversupply in some regions, leading to lower property values and weak rent growth, which has reduced developer and investor appetite for new projects.
- New single-family home sales rose 10.6% month-over-month and were up 5.9% year-over-year in July 2024, according to the US Department of Commerce. July’s rise in home sales marked the biggest gain in more than a year as interest rates moved lower. For the week ending September 5, the average fixed-rate 30-year mortgage rate was 6.35%, down from 7.12% a year earlier. Housing industry observers expect mortgage rates to continue trending downward amid anticipated interest rate cuts by the Federal Reserve, according to Reuters. However, high home prices remain an obstacle for many would-be buyers. The median new home sales price in July 2024 was $429,800, up 3.1% from June but down 1.4 compared to July 2023.
- Demand for building design services improved in July over the prior month, but architectural billings remain soft, according to an August report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 48.2 in July from June’s reading of 46.4. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries rose to 52.4 in July compared to 51.6 in June, and the index for the value of new design contracts increased to 46.5 from 45.6. The AIA’s Chief Economist, Kermit Baker said, "Architecture firms continue to face a billings slowdown. However, the emerging prospects of lower interest rates coupled with a modest uptick in project inquiries suggest that some dormant projects may be revived in the coming months.”
- The total value of nonresidential building construction starts increased 25% in July from June, according to Dodge Construction Network. The gain was led by a 33% increase in manufacturing projects, while commercial construction starts advanced 30% on stronger lodging and data center spending. Institutional starts grew by 18% in July over June, fueled by a robust uptick in healthcare projects. Dodge Construction Network chief economist Richard Branch said, “Construction starts showed great promise in July. However, the short-term remains questionable due to high interest rates. The Federal Reserve is likely to cut interest rates in September, which will, over time, make market conditions more conducive to moving projects forward. In the meantime, construction starts will likely remain volatile over the next few months.”
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