According to Charlie Hall, a professor & Ellison Chair in the department of Horticultural Sciences at Texas A&M University, broader economic indicators can show how healthy the horticulture industry is. One example he cites often: the housing market, and how increased home sales historically have meant increased plant sales. Below, Hall discusses some of the major economic storylines and how they could affect the industry.
Greenhouse Management: When you look at something like the May job report, which said 100,000 fewer jobs than expected were created and the jobs created was down from the three-month average, what does that signal to you about the economy?
Charlie Hall: Well, it signals that it’s lies, darn lies, of statistics. I’m not saying the statistics are wrong, but you’ve got to remember when we were creating a lot of jobs a few months ago. A lot of that was government employment because of all of the storms, the flooding in the Midwest, all the destruction that we’ve seen from climate change. We’ve had to hire more people, even in the private sector, and the government sector, in which to handle the claims, in which do some of the cleanup work and to pay for restitution and so forth. And now when things are slowing down in terms of disaster-wise and you look at the month-over-month growth in jobs, of course it’s going to be slowing down. To me, it’s not unexpected. When that gets negative, then I’m going to start worrying.
GM: When you consider the trade disputes with China and Mexico and possible tariffs, how could that affect the economy?
CH: Well, the president finally admitted that it’s the importers that really pay the tariffs. It’s not that China’s paying the tariffs — our importing firms are having to pay the tariffs and then those firms pass on those costs, and then ultimately those costs are passed on through the supply chain to the consumer. In most of those trade wars that have happened in the past, it’s the consumer that’s taken the brunt of it in terms of increased prices, and that’s the fear this time as well. Most economists who study international economics agree that a fair trade system is always better than a system where you have unilateral, or even bilateral tariffs that are going on and you’re trying to affect policies.
GM: When you look at the Millennials and Gen Z and the next generation of consumers, is there an impact on the economy being felt yet?
CH: Right now, the Millennials are coming into their main income earning years, right? The oldest ones are 39 years of age, they’re just a few years away from starting to make the big dollars, because [for] most people between 45 and 55, that’s the prime spot. It’s in that range that they start making a big difference. Gen Z, although smaller than the Millennials group, is still price-insensitive. They’ve shown a willingness to pay for environmental friendliness attributes and quality. But that’s not the only demographic change to monitor. If the U.S. does end up being a snapshot of what Houston is today, then Hispanic and Asian-American preferences are slightly different — are we ready to cater to their preferences?