Last week Harvey M. Bernstein, Vice President of Industry Insights and Alliances, McGraw-Hill Construction, gave a lively presentation at Georgia Tech. His talk was titled Construction Outlook: Key Trends Shaping the Future of the Design and Construction Industry. Mr. Bernstein leads the company’s thought leadership and green building initiatives and manages its market research group and partnerships with industry associations. McGraw Hill is known and respected for their market research and I was excited to see what trends Mr. Bernstein was tracking.

The crowd was a mix of students, faculty, and local industry professionals. It’s no secret that the construction industry, and economy as a whole, is in the midst of a slow climb out of the great recession. Some, like Sam Rashkin, believe high performance construction is the saving grace for the residential new construction industry (see Retooling the U.S. Housing Industry: How It Got Here, Why It’s Broken, How To Fix It). Mr. Bernstein didn’t go that far, but it was clear that the green building industry continues to grow and McGraw-Hill predicts this trend to only continue.While Mr. Berstein’s overall tone was positive, the data doesn’t always support a rosy picture for the US industry. The reality is that the majority of economic and population growth are occurring in countries like China, India, and Brazil. To compound matters, the US is not investing as much money in its aging infrastructure, which further limits economic opportunities. Thus, the greatest business opportunities will be in developing countries. As a result of this incredible growth, there will be significant strain on local natural resources and green building will take on greater importance.

McGraw-Hill Construction uses a rather broad definition of green building, which raises some questions about their data. McGraw-Hill’s “Green Construction Market” definition:

“We define green building as one built to LEED standards, an equivalent green building certification program, or one that incorporates numerous green building elements across five category areas: energy efficiency, water efficiency, resource efficiency, responsible site management and improved indoor air quality. Projects that only feature a few green building products (e.g., HVAC systems, waterless urinals) or that only address one aspect of a green building, such as energy efficiency, are not included in this calculation.”

Since third-party verification is not required, McGraw-Hill often replies on builders and contractors to self-report their green building practices. This is problematic to say the least. Despite these concerns, the data was overwhelmingly positive. In 2011 green building accounted for 38% of all nonresidential starts. By 2015 this is predicted to grow to 48% of nonresidential starts.

McGraw-Hill has found good growth in new single-family green construction despite economic downturn. Between 2006 and 2010 the percent of new homes that were green grew from 2% to 16%. Mr. Bernstein predicts that environmental product declarations (EPD) and Life Cycle Analysis (LCA) will play an increasingly important role and drive product manufacturers to provide greater transparency in product attributes.

Interestingly, Mr. Bernstein didn’t spend much time discussing future energy prices or building codes and how they will affect building practices.  Instead the primary drivers for green building will be:

• Desire for increased occupant productivity, satisfaction and well being
• Demand for transparency on product attributes
• The commercial building market will be driven by higher asset and appraiser value for green buildings

All this data definitely made your head spin a little by the end of the talk, but I think the overall trends in green building were incredibly positive. What do you think? Are you seeing this growth in green building?