One of the areas where FMI has seen increased market activity is the industry’s acceptance and application of green construction practices. The majority of contractors are continuing to see robust demand for green construction in their backlogs, even if those backlogs are down. While some predict green construction practices and mandates will lead to tighter margins and higher costs overall, others believe that green equates with affordability, thrift and reuse of older structures.

FMI predicts that total U.S. green construction put in place will increase from $19.7 billion in 2009 to $22.7 billion in 2013. While the whole pie of construction is getting smaller, green construction is taking a bigger piece. For example, the amount of green office space constructed last year was almost 10 times the amount in 2002 and the volume has increased significantly every year since then. At the same time, overall office construction in the nation has been far less than that, so there has been a
decisive swing from conventional to greener construction. In 2002, total green construction represented 1% of U.S. total nonresidential construction put in place, but by 2013, it is predicted to increase to more than 5%. As a result, the U.S. construction market may be a bit darker, but also a bit greener.

Of course, the intensity of green varies depending on the particular market, both vertically and geographically. The vertical markets that appear to have the greatest opportunity for green construction, as measured by market size, market growth and saturation of the total construction market segment, include office, educational and health care. Those just starting to incorporate green building practices include commercial, lodging and manufacturing. Particularly in the institutional markets, an increasing number of owners understand the benefits of building green and are now looking for construction partners to assist with the implementation of innovative green building practices. In the lodging sector, Marriott International recently broke ground to build the first hotel using its green hotel prototype. The Courtyard Charleston/Summerville in South Carolina, due to open in 2012, will meet Leadership in Energy and Environmental Design (LEED) certification, and the U.S. Green Building Council (USGBC) has approved it as part of its LEED volume program. LEED’s volume certification process allows properties that are developed following an approved prototype to become certified more quickly than stand-alone or one-time projects. Marriott’s goal is to have 300 LEED hotels by 2015.

While LEED-certified buildings can be found in every state and more than 400 cities acrossthe U.S., green construction is still highly concentrated in larger, urban and more progressivestates and metros. It is estimated that the greenest 15 states have two-thirds (67%) of the LEED building area, compared to only 40% of the nation's population. States such as California, Oregon, Washington and
Pennsylvania have the most LEED-certified buildings and are considered to be on the forefront of the green building movement. In many of the leading geographies for green construction, there is strong political support for green initiatives. For example, the mayor of Los Angeles has made environmental issues a top priority and recently announced that by 2020, renewable sources will meet 40% of the
city’s energy needs. In contrast to these market leaders, green construction in the Great Plains, including North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Montana and Wyoming, is still limited and represents less than 5% of the nation’s green construction put in place total.

Green is no longer a nascent term in the construction industry. In fact, in a number of construction markets, it is quickly becoming the status quo. Several of the industry’s largest construction markets, including office, educational and health care, will continue to have the greatest demand for this type of construction, particularly on the East and West coasts. Contractors looking to capitalize on these
opportunities must have the capabilities and resources as well as the proven track record of being able to deliver LEED-certified projects, which is still the accepted measuring stick for green construction experience. Now is the time to become involved in this expanding market and to push the envelope even more when it comes to innovative green building practices. Industry participants looking for
positive trends during these difficult times need to look no further than the construction market’s green lining.

Written by Kevin Haynes

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