Green Building Outlook Strong for Both Non-Residential and Residential Sectors Despite Soft Economy.
By Mark S. Kuhar
The U.S. green building market continues to accelerate, according to McGraw-Hill Construction’s “2013 Dodge Construction Green Outlook” report. The value of green building has seen growth from $10 billion in 2005 to $78 billion in 2011. In 2012, the total market – non-residential and residential – is expected to be worth $85 billion, and by 2013, overall new green building is projected to rise to between $98 billion and $106 billion. By 2016, this number is expected to reach $204 billion to $248 billion.
According to the report, green building remains a bright spot in a still uncertain economy. Green is expected to represent 44 percent of all commercial and institutional construction in 2012, growing up to 55 percent by 2016. Residential green construction is also on the rise. It is expected that by the end of 2012, green homes will comprise 20 percent of the market, and in 2013 a 22-25 percent share by value is expected, equating to a $34-$38 billion opportunity. By 2016, this share by value is expected to increase to 29-38 percent – an estimated $89-$116 billion – based on the current single-family residential construction forecast.
To break it down further, while education construction is down, green has remained a stronghold at 45 percent, continuing to be the largest opportunity for green building. The office market has the largest share of green with 54 percent in 2012, a bright spot considering the overall expected growth of the sector in the near term.
“We’re seeing tremendous growth in green building, providing a bright light in an otherwise uncertain economy,” said Harvey M. Bernstein, vice president, Industry Insights and Alliances for McGraw-Hill Construction. “Not only does this mean a strong outlook for green building, but also the benefits that go along with that: more jobs, greater financial benefits from green and high performance buildings, stronger competitive positioning for those firms that build green, and healthier work and learning environments for our population.”
Other key points found in the study include:
- Health-related green building labels are taking force in construction specifications, growing more rapidly than any other aspect of green construction.
- One-third of all homebuilders in the U.S. expect to be fully dedicated to building green by 2016.
- Green construction jobs are following the green building market; 35 percent have green jobs today.
- Eighty-one percent of executive leaders in corporate America believe the public expects them to engage in sustainability – one of the key forces driving corporations to institutionalize some green efforts. Thirty percent of senior executive officers report that they are greening two-thirds of the buildings in their portfolio – with 47 percent expecting to do so by 2015.
A green building is defined as one built to LEED or an equivalent standard, or one that is energy- and water-efficient that also addresses improved indoor environmental quality and/or resource efficiency.
Green Building Accelerates Globally
Around the world, the green building marketplace is accelerating, according to a new study being released by McGraw-Hill Construction in partnership with United Technologies.
The study indicates a shift in the global construction market, now viewing green as a business opportunity rather than a niche market. Overwhelmingly, firms report that their top reasons to do green work are client demand (35 percent) and market demand (33 percent) – two key business drivers of strategic planning. The next top reasons were also oriented toward the corporate bottom line – lower operating costs (30 percent) and branding advantage (30 percent).
In contrast, the top reason in 2008 motivating the green building market was doing the right thing (42 percent) and market transformation (35 percent), followed by client and market demand.
In the next three years, the sectors with the largest opportunity for green building around the world include new construction and renovation projects. Sixty-three percent of firms have green work planned in new commercial projects and 45 percent in new institutional projects by 2015, and 50 percent have plans for green renovation work.