November 15th, 2010
From Green Right Now Reports
Despite the recession, the U.S. green building market is accelerating at a dramatic rate, according to a report from McGraw-Hill Construction.
Green building represents a quarter of all new construction.
The company’s Green Outlook 2011: Green Trends Driving Growth report (available for $249) found the value of green building construction starts was up 50 percent from 2008 to 2010 — from $42 billion to $55 billion-$71 billion — and represents a quarter of all new construction activity in 2010. According to projections, the green building market size is expected to reach $135 billion by 2015.
Green building is the bright spot in an otherwise tough economy, and in some sectors, that rate of growth has been remarkable, the industry report said. In nonresidential building, for example, 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 percent-48 percent of the nonresidential market) and $14 billion to $18 billion in major retrofit and renovation projects.
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). Education (valued at $13 billion–$16 billion in 2010) and office green construction (valued at $7 billion–$8 billion in 2010) also remain strong sectors, showing high increases in market share, due in part to the fact that bigger projects are the most likely to “go green.” This year, the U.S. Green Building Council’s LEED specification is mentioned in 71 percent of all projects valued at over $50 million.
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
- Increase in return on investment (ROI) of 9.9 percent for new buildings and 19.2 percent for retrofits
Beyond these bottom-line advantages, McGraw-Hill Construction 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.
