Artificial Grass Turf Installation
Business for Sale Industry Economics
2003 - 2020
2020 - 2026
The Artificial Grass Turf Installation sector consists of commercial and residential property owners as well as sporting organizations that use synthetic or artificial grass for uses like lawns and playing fields. Improved manufacturing-level technologies and a growing emphasis on water conservation measures have been contributing to the overall industry revenue growth throughout the five-year period from 2013 to 2020.
Further, because of a rise in building activity from 2009 to 2016, the sector has benefited from recent robust activity in building markets throughout the last eight years, prior to the COVID-19 (coronavirus) pandemic that ravaged nonresidential building markets in 2020. From 2019 until the end of the decade, a rise in sports turf installations and a rising residential building market have led to continued expansion in the business.
The combination of increased demand and new business initiatives will lead to a 5-year CAGR (Compound Annual Growth Rate) of 1.1% to $2.6 billion in industry revenue. Though global GDP is expected to decline by 11% in 2020, because to the coronavirus pandemic and consequent economic collapse, this growth is seen as despite rather than because of it.
Because the industry’s success is directly tied to the creation of markets and the sport spectator base, it benefits from an increase in building activity and an increase in the overall economy. The growing understanding of the costs savings and environmental advantages of artificial grass goods has also contributed to the rise in the use of industrial goods and installation fees.
It is further crucial to note the advances in technology on the part of producers, such as the greater usage of polyethylene yarn, that have further aided the acceptability of artificial grass in sporting applications. In this manner, industry profit, as defined by net profits before taxes and interest, is predicted to account for 7.7% of industry revenue by 2020.
Industry revenue is predicted to expand at an annualized rate of 2.6% over the next five years, leading to a growth of $3 billion over the next five years. Cargo volumes, such as those seen in both residential and nonresidential construction, are predicted to be reliable in terms of demand for installation possibilities throughout the economic recovery after the corona virus epidemic.
On the other hand, since the Federal Reserve’s monetary policy is predicted to raise interest rates, this is predicted to put a dampener on the industry’s overall growth prospects by the end of the projection period. Sizes of organizations, especially the small and medium-sized ones, are projected to be more difficult for the industry’s smaller participants to break into, as bigger competitors combine and acquire to become vertically integrated corporations with production and installation divisions.
New technology breakthroughs, along with worries about the environment, have meant that the Artificial Grass Turf Installation business has held onto its place as one of the fastest-growing divisions of the landscaping and home improvement business. In addition, water conservation efforts in residential and commercial properties have remained vigorous throughout the next five years, notably due to the widespread effort of customers to save money on landscaping and irrigation bills.
There is a correlation between the construction market and the industry. This connection is stronger throughout the five-year period due to the upswing in building activity. Despite these initial optimistic results, the economy went into a steep decline after the coronavirus epidemic and slowed much more with the rise of a new global power. With social distancing standards and restrictions in place to assist control the spread of the virus, the great majority of the economy was compelled to temporarily shutter or shut down.
This had the effect of increasing the unemployment rate and causing a fall in consumer expenditure. So as a result, the nonresidential building sector saw a reduction in business, as legislation that promoted non-motorized travel and development of bike paths and trails impacted the entertainment and entertainment industry.
As a consequence of these developments, industry revenue is predicted to fall 11% in 2020 alone, which has a large impact on the five-year revenue trend, which falls to a 1.1% annual growth rate over the next five years to $2.6 billion.
Artificial turf is constructed of synthetic fibers and fibers which mimic real grass, therefore creating a surface that closely resembles real grass. It has been possible to produce artificial grass since the 1960s, but improvements in quality, safety, and affordability did not occur until around the turn of the century.
The benefits these innovations have provided for artificial turf and grass have had a major impact on the business, and they are now helping to fuel the demand for turf in new application areas, including residential lawns and commercial premises.
It was during the 1990s that the first synthetic grass systems that were designed with sand and rubber infill were used, which significantly enhanced the performance and safety of the playing surface. Over the last decade, turf and grass producers have been using their efforts to produce products that seem more natural to help them gain an edge in the residential sector, which is one of the fastest-growing business areas.
Manufacturing industry success is closely connected to construction market activity. For example, the demand for grass installation services is linked to movements in property markets, since grass and lawn fittings are often placed during the building of new residences and sports fields.
Since new residential building is indicative of industry demand, the amount of new residential building is indicative of industry demand, while nonresidential development, which shows a level of demand from the amusement and leisure industries, serves as an additional indication. Although coronavirus pandemic might negatively impact the pace of residential building, which is forecast to climb at an annualized rate of 1.2% in 2020, that rate is projected to climb by 1.5% over the next five years, including an increase of 1.2% in 2020.
Meanwhile, the predicted rate of decline in the value of private nonresidential construction is estimated to be 9.4% between now and 2020, as the unemployment rate rose to an unprecedented high and businesses closed or entered into bankruptcy at an accelerating pace. As a result, commercial building development and general entertainment and entertainment facilities are projected to have diminished demand.
With the downturn of industry, the need for industrial services will be hindered. Even if the possible industry income level has risen, because of the outbreak of a contagious disease, the increase is still confined to the first stage, since it is concentrated on restricted outdoor recreational locations like parks. as a consequence, the industry’s 11.0% revenue fall anticipated for 2020 actually indicates a cautious decrease compared to the wider entertainment and entertainment sector.
PE, polypropylene, and nylon turf are often used in the manufacturing of artificial turf and grass. PE fibers are very soft and are widely used for landscaping, golf course putting greens, field hockey goals, and chipping greens. Nylon and polypropylene fibers are much harder and are used for putting greens, chip or field hockey pitches, and for the nylon stock on the basketball floor.
Although artificial grass does not hold much sunlight, it is used often as an indoor playing surface or for stadiums that have domes. The early installation of artificial turf resulted in a significant increase in injuries, including turf burn and turf toe; however, as technology advances, the installation of artificial turf is now comparable to real grass, resulting in fewer injuries.
In terms of its principal causes, this improvement is mainly attributable to the widespread use of polyethylene yarn. Also, since a growing number of producers provide hybrids of artificial turf and natural grass, when artificial turf is laid and soil and grass seed are used to create a mixture of synthetic and natural turf, it’s becoming common to observe.
There has been a noticeable rise in the demand for artificial turf and grass in recent years due to significant quality improvements and rising environmental concerns, especially around water conservation, pesticides used in natural grass fertilizers, and pollution caused by lawnmowers and other landscaping equipment. One-third of all residential water usage relies on landscape irrigation, using more than 9 billion gallons each day.
Using data from the Southern Nevada Water Authority, artificial grass is predicted to save around 55 gallons of water per year for every square foot of natural grass that is replaced. While pesticides are undeniably harmful to the environment, run-off of hazardous pesticides and fertilizers is considered the main contributor to water contamination. For example, over 350,000 acres of lakes have been damaged by nutrient contamination, the major cause of which is excess fertilizer.
In general, the Artificial Grass Turf Installation industry’s market share has continued to rise, making up a larger part of the country’s total GDP. Advancements in technology, more merger and acquisition activity, and a growing market share have all been noticeable throughout the years.
The growth of the American industrial sector between 2016 and 2020 is projected to average a pace of 0.3% annually, adding 6,042 people, as most of this growth is predicted to occur because of the decreased growth expected in 2020 in the wake of the coronavirus pandemic.
Even although this [the number of industry corporations] is growing at an annualized pace of 0.9% to 1,709 corporations, there will be an additional 813 industrial establishments added each year for the next five years. The present economic circumstances have resulted in increasing demand for industrial services for most of the time.
There is also a rise in family earnings, which means that customers are able to upgrade to higher-quality synthetic grass and so increase profitability. industrial profit, calculated as profits before interest and taxes, is predicted to rise from 7.0% of industry sales in 2015 to 7.7% by 2020.
As improvements are likely to be made to the macroeconomic landscape, the Artificial Grass Turf Installation business is expected to see sustained development over the next five years. Although consumers and businesses have found new ways to reduce water use, artificial turf and grass installations are expected to increase due to increased demand from both residential and nonresidential construction markets due to the coronavirus pandemic and the rising prevalence of landscaping applications in both residential and nonresidential construction markets.
While building activity has been notably boosted, significant increases in financing for schools and other organizations are predicted to fuel development in the construction sector over the next five years. Furthermore, it is projected that commercial clients would increase demand for grass installation due to increasing need for sports fields. With that in mind, industry revenue is projected to expand at an average pace of 2.6% to $3 billion over the next five years.
While new building activity is likely to expand in the residential sector over the next five years, demand for artificial grass and turf is also anticipated to rise due to residential development. An increase in the number of home starts is closely associated with an increase in demand for artificial grass installation services.
Over the five-year period to 2025, the rate of new house building is predicted to grow at an annualized rate of 1.8%, causing an uptick in demand for artificial grass installation, since synthetic lawns are often placed during the initial building phase of a house.
Due to increased environmental concerns, there is an increase in house developers using synthetic rather than natural lawns, especially in dry locations. Furthermore, total private expenditure on home renovations is projected to rise at an annualized pace of 3.1% over the next five years, providing even greater boost to industry revenue growth.
Nonresidential artificial turf and grass installation, a significant portion of the market, comprises installation of grass for commercial buildings, schools, day care facilities, medians on roads, and airports. The demand for synthetic grass is predicted to increase over the next several years due to towns and water conservation agencies providing business and school discounts for companies and schools to replace natural grass with artificial lawns.
Additionally, lowered operating costs and water expenditures are anticipated to promote greater numbers of educational and commercial facilities to substitute artificial grass with AstroTurf. However, there are rare occasions in which artificial grass systems have either failed or degraded before their stated lifespan. It will rely on better product delivery in the industry to determine whether the company can flourish in this particular customer sector.
Institutions that provide many jobs, such as schools and stadiums, comprise a substantial amount of business income, like all other big sectors, and are likely to see an increase in artificial grass demand over the next five years. Increasing disposable income and overall macroeconomic circumstances will lead to an increase in demand for spectator sports, along with more resources for maintaining schools and sports facilities.
Additionally, the overall amount of government consumption and investment is projected to increase at a yearly pace of 0.8% during the next five years. And further, governments that have seen a decline in income should expect to see this lost money make a return whenever the unemployment rate lowers and governments recoup the funds that they have lost.
A future advantage of investing further government money to encourage water conservation is that artificial grass contractors may expect more business. Following the coronavirus pandemic, an estimated economic recovery is predicted to occur over the next five years. As a result, operators in the sector are projected to gain from the increased revenues that return to growth.
The higher demand for industry goods and services over the next five years is predicted to offer even more chances for industry entrants, which will lead to even more employment and supported profit growth. Over the next decade, the total number of industry firms is forecast to expand at an annualized rate of 1.7 percent annually to 1,855 operators, while the total number of industry workers is predicted to expand at an annualized rate of 2.1 percent annually to 13,389 persons.
Of industry sales, the average profit margin is predicted to climb to 7.9% during the next five years. Even with the further progress in the production of artificial grass, it is expected that service providers would be able to charge more money for their services. Not only will vertical integration of big corporations boost corporate profitability over the next five years, but they will also contribute to a more efficient installation process and lower supplier costs.
In this business, the businesses who install artificial turf and synthetic grass are also known as installers. The industry comprises installations that are done by integrated manufacturers as well as installations that are done by operators that use artificial turf and grass that is sourced from third parties. Manufacturing-related activities are removed from the computation of the overall industry size.
During the early development stage of its life cycle, the Artificial Grass Turf Installation business is now seeing significant growth. Throughout the next 10 years, industrial value added (IVA), which takes into account the contribution of an industry to the entire economy, is predicted to grow at an annualized rate of 1.7 percent. Whereas GDP is forecast to increase at an annualized rate of 1.9%, US GDP is anticipated to expand at a slightly higher pace of 1.9% over the same time period.
Typically, an industry is regarded to be in the growth phase of its life cycle when the rate of industrial development surpasses the broader economy during a 10-year period. Additionally, this stage is marked by significant growth in the number of company entities, a changing technology environment, and increasing market adoption of industrial services by downstream markets. The key reason why this business is referred to be a booming business is because of the second item listed above.
Between 2017 and 2025, it is estimated that the number of industrial businesses will grow at an annualized rate of 1.2 percent. While mergers and acquisition activity has also been noticeable over the last several years, the development of business hasn’t been impacted much by these practices. Nonetheless, success for smaller businesses is forecast to become more challenging in the years to come, as major businesses are predicted to grow their market share.
Additionally, bigger operators have been taking steps towards building vertically integrated enterprises that both produce and install artificial grass and turf. These businesses have been able to lower procurement costs and enhance profit margins due to this arrangement.
The many technological advances now favoring industrial development will continue into the future. Additional development initiatives that increase the safety and quality of artificial grass and turf are also accompanied by a higher installation cost. For instance, it has been shown that recent advancements have greatly lowered the risk of turf-related injuries and made artificial grass seem more genuine.
With the advent of these innovations, demand for artificial grass has surged amongst families and sporting arenas, which in turn benefits installation services. In addition, the industry’s beneficial environmental effect is also expected to fuel further development over the next few years, as various markets continue to bolster their water saving initiatives.