 Paycheck Protection Program Loans in Tennessee's Landscape Services Industry April 3-August 8, 2020Alicia Rihn, Sreedhar Upendram and Kimberly L. Jensen No 308843, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics Abstract: Landscape service firms provide commercial landscaping services including design, installation and maintenance of turfgrass lawns, ornamental plant beds, gardens and other outdoor areas for private residences and commercial properties. In 2020, the U.S. landscaping services industry consisted of 510,000 firms who had a revenue of nearly $102 billion and employed one million people with wages of $32.9 billion (Diment, 2020). In Tennessee, the landscaping industry consists of 1,679 firms employing 12,475 workers with an annual payroll of $424.5 million indicating an annual average wage of $34,000 (U.S. Census Bureau, 2018). The majority (82 percent) of the industry’s products and services are related to landscape maintenance activities (Diment, 2020). Thus, this industry’s revenue is closely tied to new housing developments, the housing market (in general) and consumers’ disposable incomes. On March 11, 2020, the World Health Organization (WHO, 2020) declared the Novel Coronavirus Disease (COVID-19) a pandemic. Shortly after, on March 13, 2020, the COVID-19 outbreak was declared a national emergency by President Trump (White House, 2020). Actions were taken to decrease community spread and Americans were encouraged to stay home, avoid large group gatherings and avoid unnecessary outings. Aligning with these directions, Tennessee’s Governor Lee passed the Executive Order No. 22 (EO 22) encouraging people to stay at home except for essential activities or services (State of Tennessee, 2020). Under EO 22, landscape management was deemed an essential infrastructure operations service and landscaping firms were allowed to remain open. However, several factors related to the COVID-19 pandemic and economic downturn could negatively impact the landscaping service industry. For example, businesses who closed or reduced their activities could influence product availability through supply chain disruptions, as well as customers’ employment and disposable incomes potentially dropping, reducing spending on non-essentials. Furthermore, the landscaping service industry is heavily influenced by the housing market which experienced a drop in March and April, 2020 potentially due to the uncertainty caused by the pandemic (U.S. Census Bureau, 2020). Despite this momentary drop, the housing market rebounded and continued to have positive growth after those first few months of the pandemic meaning the impact of this drop on the landscape service industry was likely temporary. In order to mitigate potential economic hardships from the pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act was passed on March 27, 2020 (U.S. Department of Treasury, 2020). As part of the CARES Act, the Paycheck Protection Program (PPP) was implemented and administered by the Small Business Administration through local lending firms. The goal of the PPP was to provide support for payroll and other operating expenses to small businesses during the pandemic and economic downturn. The PPP provided over $660 billion in forgivable loans (Bureau of Economic Analysis, 2020). This report summarizes the PPP loans approved to landscaping service firms in Tennessee and several neighboring states to provide an overview of the aid and its influence in Tennessee’s landscaping services industry. Keywords: Labor and Human Capital; Production Economics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:utaeer:308843 Access Statistics for this paper More papers in Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics Contact information at EDIRC. |
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