Source: McGraw-Hill Construction, New York
The value of green building construction during the 2008–2010 slump grew from from $42 billion to $55 billion–$71 billion; represents 25 percent of all new project activity this year; and, is on pace to reach $135 billion in 2015, according McGraw-Hill Construction’s “Green Outlook 2011: Green Trends Driving Growth” report.
Green building is the bright spot in an otherwise tough economy, and in some sectors, report authors contend, growth rate has been remarkable.
In nonresidential building, the green building market share is even higher than the overall market; today, a third of all new nonresidential construction is green—a
$54 billion market opportunity. In five years, nonresidential green building activity is expected to triple, representing $120 billion to $145 billion in new construction (40–48 percent of the nonresidential market) and $14 billion to $18 billion in major retrofit and renovation projects.
To break it down further, “Green Outlook 2011” notes, a) health care construction this year is expected to grow its green share to as much as 40 percent (valued at $8 billion–$9 billion in 2010); and, b) education, valued at $13 billion–$16 billion in 2010, and office green construction, $7 billion–$8 billion in 2010, also remain strong sectors, showing high increases in market share as larger projects are the most likely to “go green.” This year, the U.S. Green Building Council’s LEED specification is mentioned in 71percent of all projects valued at over $50 million.
“It’s an amazing area of opportunity at time the market is extremely challenged,” said McGraw-Hill Construction’s Harvey Bernstein, vice president, Global Thought Leadership and Business Development. “In today’s economy, firms that specialize in green or serve this market are seeing a tremendous advantage.”
Aside from market size estimates, the 32-page Green Outlook 2011 report provides insights into key trends, perceptions and motivators in the green building space. For example, building owners cited three business benefits as the main drivers for building green: Reduction in operating costs of 13.6 percent on average for new buildings and 8.5 percent for retrofits; increase in building values of 10.9 percent for new buildings and 6.8 percent for retrofits; and increase in return on investment of 9.9 percent for new buildings and 19.2 percent for retrofits. McGraw-Hill Construction likewise attributes green building’s rapid expansion to owners’ desire for market differentiation, growing public awareness, and an increase in local and federal government regulations. As of September 2010, green building legislation and initiatives were present in 12 federal agencies and 33 states, and the proliferation of local government initiatives have increased at an especially impressive pace — from 156 localities in 2008 to 384 localities in 2010.
Copies of the report can be ordered at http://construction.com/market_research.