July 15, 2012
By Phil Charal
LO President

phil charal Over the past few years, it has become increasingly difficult to predict business cycles. When you don’t know what to to expect in terms of the volume of business, it makes it very difficult in terms of hiring new employees, equipment purchases and expenditures related to forward planning.

The recent economic difficulties have created apprehension in our customers’ willingness to purchase our industry’s services.
Many company executives are sitting on cash and bracing themselves in preparation for higher financial costs. They are worried about the potential disasters in Europe that will affect North American business in the months ahead.

Busy spring

This spring was extremely busy for my firm. Compared to last fall and winter, this is a huge change. Back then we all worried about how slow things had become, and if it would remain that way throughout the year.

One of the changes I now see is that most of our customers demand more detail and options on landscape design and construction work. This high level of expectation also includes garden maintenance, with clients expecting exceptional service.

I am not surprised, when you consider that most of our customers’ investment portfolios are not healthy. As well, the long-term investment prospect is not promising.

With the disappointing economic data and profits shrinking, one has to wonder why we have not seen more downward revisions. We continue to see market analysts much too optimistic. When companies miss earnings projections, it does not sit well with investors.

I say this because, generally when our customers’ portfolios show reasonable earnings, even though it’s only on paper, there is more willingness by them to invest in our products and services.

Lucky to be in Canada

As of this writing, Greece is in chaos, with Spain, Ireland, Portugal and Italy not far behind. The rest of Europe is in severe recession.

My project manager just returned from a trip to Northern Ireland. He was devastated by what he witnessed in that country, and very sadly for him he saw evidence in his hometown. Upon his return, he said, “I had a great trip, but the state of my boarded-up hometown really depressed me.”

If I compare Canada to the rest of the world, there is no better place to live. We are so lucky to have our way of life, a stable economy and natural resources. I try very hard to be optimistic about Canada, and for selfish reasons, Ontario. I prefer to see the glass half full.

Our government has been somewhat fiscally responsible. The fact of the matter is that we are all going to need to work harder to achieve the same financial results we saw in years gone by. We need to be very focused on profitability and increasing margins, and making more from less.

Europe’s problems will have some impact on Canada, but we must be prepared. However, we are more tied to the U.S. economy. That country appears to be weathering the storm and making good progress.

Let’s all keep working hard, as we always do, and good things will come our way.

Phil Charal may be reached at pcharal@landscapeontario.com.