Wednesday, February 5, 2014

Green Building Industry Worth $36 Billion and Expected to Double in Value by 2016

McGraw Hill study shows green building will increase market share in 2014
According to a recent report by McGraw Hill Construction, green building will continue to grow worldwide throughout 2014 and is expected to double in value by 2016. The Wall Street Journal recently reported that a McGraw Hill Construction--part of McGraw Hill Financial--study found the green building industry is currently valued at $36 billion. Findings from the Green Home Builders and Remodelers Study at the National Association of Home Builders demonstrated that green homes are continuing to grow in popularity. McGraw Hill has predicted that green building industry will be valued at $83-$105 billion by 2016.  Additionally, they posited that green building experience and knowledge helped builders succeed during the housing downfall in the recession.

The McGraw Hill study found that:

  • The green market share will account for 23%-33% of the residential construction market share by 2016
  • 51% of green builders and remodelers found marketing green homes is easier than traditional homes
  • 84% of remodelers and 68% of builders found customers were willing to pay 3% more for green remodeling and 5% more for green homes
  • 62% of green builders expect over 60% of their projects to be green this year

Last summer, McGraw Hill released a study on the impact of green building on the hospitality and retail industry, finding that not only did these industries experience significant ROI by going green, but customers also tended to value green industries more. Customers are willing to pay more to engage in what they believe is healthier, more-environmentally friendly behavior. Customers also place high value on being able to shop or stay in green buildings as 41% of retail shoppers and 70% of hotel customers reported that they valued shopping or staying in green buildings.

A report recently published by Jerry Yudelson, a major green building industry leader, found that green buildings accounted for 30% of new buildings in 2013 in America and 20% of new buildings in Australia, and that the green industry will continue to grow worldwide.

Yudelson predicted that green trends of energy efficiency, water efficiency, and solar power will contribute to the growth of green remodeling and building this year, and that the demand for these certifications will rapidly increase. Schools, nonprofit organizations, hospitals, and federal buildings are at the forefront of the green building initiative. Additionally, he suggests that there will be a higher demand for green remodeling, rather than new green buildings, in the future. The federal government has already begun plans for reconstruction and redesign on its buildings to ensure that they are energy efficient.

The Sourceable article on Yudelson went further, stating that ENERGY Star ratings and efficiency certifications can give a competitive advantage for companies, but these ratings are almost too commonplace, and the new goal is zero-net energy buildings. Builders will need to have a complex understanding of green building certifications such as LEED.

View the McGraw Hill study here: analyticsstore.construction.com/GreenHomeKeyFindings14

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