Booming Green Opportunities in U.S. Construction · Green Jobs Key to Future Construction Workforce...
Transcript of Booming Green Opportunities in U.S. Construction · Green Jobs Key to Future Construction Workforce...
April 26, 2012
Booming Green Opportunities in
U.S. Construction “Patience, focus, and… keep rowing for shore!”
2012 Construction Outlook
Keven Andrew McCook Integrated Solutions and Consulting [email protected]
2 2 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Agenda
The U.S. Macroeconomic Environment U.S. Construction Market Outlook and Green Building
Market Opportunity U.S. Green Retrofit & Renovation Market U.S. Green Residential & Remodeling Market Concluding Thoughts Discussion
2 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.
3 3 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
The U.S. Macroeconomic Picture
4 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Inflation overall was subdued; oil prices have moved up, down, now up again. U.S. Macroeconomic Picture
• Fed expects inflation will settle back in coming quarters; however,
price of energy remains volatile, affected by instability in the
Middle East.
Consumer Price Index
-3-2-10123456
01 02 03 04 05 06 07 08 09 10 11 12 13
Percent Change, Year-over-Year
CPI
Core CPI
U.S. Dollar vs. Major Currencies
60
70
80
90
100
110
120
01 02 03 04 05 06 07 08 09 10 11 12 13
Exchange Rate, Indexed, 1973=100
Price of Oil
0
25
50
75
100
125
150
01 02 03 04 05 06 07 08 09 10 11 12 13
Dollars per Barrel, West Texas Crude
5 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Federal budget – $1.3 trillion deficit in fiscal 2011. Appropriations for fiscal 2011 and 2012 included cuts for many programs. Provisions of debt ceiling agreement mean more cuts likely going forward.
U.S. Macroeconomic Picture
Federal Budget Surplus/ Deficit
-1,600-1,400-1,200-1,000
-800-600-400-200
0200400
90 92 94 96 98 00 02 04 06 08 10 12
Billions of Dollars, CBO Projections
Fiscal 2012 Appropriations • Not finalized by October 1st
• Transportation bill finalized on Nov. 18 Federal highway program trimmed 5% to $39
bil. High-speed rail gets zero funding again
Mass transit account increased 5%
• Other accounts covered in Omnibus spending bill signed on Dec. 23 Clean Water SRF’s cut 4%
Drinking Water SRF’s cut 5%
GSA new construction account cut 39% GSA repairs &renovation account
unchanged
DOD base closure account cut 77% DOD other military construction cut 8% VA major construction projects cut 45%
Corps of Engineers construction increased 5%
6 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
State fiscal health remains weak, even with recent revenue gains. U.S. Macroeconomic Picture
State & Local Governments
0
2
4
6
8
10
12
90 92 94 96 98 00 02 04 06 08 10 12
Year-end Balance, Percent of Expenditures
Note: For fiscal year 2012, if TX and AK excluded, then year-end balance is 3.7%.
For fiscal 2012, 12 states enacted budgets with balance levels below 1%, while 19 states
enacted budgets with balance levels between 1% and 5%.
Adequate fiscal cushion for a state is when year-end balance is at least 5%.
• Many states have faced large budget shortfalls, including the following states and
the gaps closed when fiscal year 2011 budgets were adopted:
– California ($17.9 billion) – Illinois ($13.5 billion)
– New Jersey ($10.7 billion) – New York ($8.5 billion)
– Florida ($4.7 billion) Source: Center on Budget and Policy Priorities
• Significantly – State Fiscal Stabilization Fund support under ARRA has diminished
substantially – 2010: $61 billion 2011: $50 billion 2012: $ 3 billion
Trends
US & Global – Sustainability/Green Building – Interoperability and BIM – Workforce/Labor – Innovation – Materials – Project Delivery Methods
Access to Capital
Market Innovation
Job Creation
Caution remains… •Low interest loans remain one of the positives in 2012
• Most of TARP paid back but lenders remain cautious; loan availability will be gradual •Of 8100 US banks, 2988 small banks at risk due to pending commercial mortgage defaults
• Between 2010 and 2014 $1.4 trillion loans coming due; nearly half at values below borrower’s loan… loan restructuring underway!
Access to Capital Low interest loans exist, but caution remains high…
-40
-20
0
20
40
60
80
100
90 92 94 96 98 00 02 04 06 08 10 12
Survey of Bank Lending Officers Percent Reporting Tighter Lending Standards for Commercial Real Estate Loans
-80
-60
-40
-20
0
20
40
60
90 92 94 96 98 00 02 04 06 08 10 12
Survey of Bank Lending Officers Percent Reporting Stronger Demand for Commercial Real Estate Loans
9 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
No double dip… but modest recovery with limited job growth expected Real GDP Growth - Quarterly
-8-6-4-202468
01 02 03 04 05 06 07 08 09 10 11 12 13
Annualized Percent Change '11 Q4 +3.0% GDP Pattern:
History Forecast 2009 2010 2011 2012 -3.5% +3.0% +1.7% +2.3%
Shape of Recovery: • Chance for “double-dip” has eased
for the moment. • Early months of 2011 saw energy
price hikes; supply chain issues.
• Also, credit rating downgrade, Federal spending cuts,
European debt concerns Pervasive uncertainty. Is early 2012 a replay?
• One plus – corporate profits healthy
10 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Job Creation Slow and cautious… Change in Total Employment
-750
-600
-450
-300
-150
0
150
300
450
01 02 03 04 05 06 07 08 09 10 11 12 13
Thousands of Workers Mar. '12
+120,000Unemployment Rate
3456789
1011
01 02 03 04 05 06 07 08 09 10 11 12 13
Percent Mar. '12 8.2%
• Jobs lost from Feb.’08 to Feb. ’10: 8.8 Million.
• Job creation so far in 2010-2012: 3.6 Million. Unemployment rate at 8.2%
• Job growth in Jan.-Apr. ’11: 207 K /mo. Job growth in May-Aug.’11: 80 K /mo. Job growth in Sept.’11-Mar.’12: 190 K /mo.
• Can recent improvement continue in 2012?
Employment growth decelerated at mid-2011, followed by
improvement. March 2012 (up 120,000 jobs)
came in weaker than expected.
11 11 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
2011 (July) 2014 (est)
661.0
2011 (July) 2014 (est)
881.6661.0
2011 (July) 2014 (est)
Trades: – 15% in 2011 – 25% in 2014
Green Jobs Key to Future Construction Workforce
Number of AEC Construction Jobs
(in thousands)
1869.0 1975.3
Total Jobs
Green Jobs 35.4%
44.6%
Source: McGraw-Hill Construction Workforce/Green Jobs survey, October 2011; total Jobs # from the U.S. Bureau of Labor Statistics
MHC Green Job Definition: For architects, engineers and general
contractors = 50%+ of green building project work
For craft workers and subcontractors = Requires significant training or different skills to meet green goals
OR Involves designing or installing a
uniquely green system
12 12 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Firms that Report Having Green Construction Industry Jobs
National Average Reporting Green Jobs • Architects/Engineers: 47% • Contractors: 39%
West South Central— Lowest % of architects/engineers report green jobs: 40%
Mid-Atlantic—Highest % report green jobs:
• Architects/ Engineers: 58% • Contractors: 46%
New England— Lowest % of architects/ engineers report green jobs: 36%
Pacific—Lowest % of contractors report green jobs: 27%
Source: McGraw-Hill Construction Workforce/Green Jobs survey, October 2011
13 13 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
U.S. Construction Outlook and Green Building Market Opportunity
14 14 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Billions of Dollars 2007 2010 2011 2012
Total Construction 640.9 -7%
431.2 +1%
426.4 -1%
433.6 +2%
Commercial Bldgs. 100.7 +8%
41.7 -12%
44.9 +8%
49.3 +10%
Institutional Bldgs. 117.7 +6%
110.8 -1%
97.1 -12%
95.0 -2%
Manufacturing Bldgs. 20.8 +51%
9.4 -3%
15.6 +65%
15.2 -2%
Single Family Housing 201.2 -26%
100.0 +6%
97.6 -2%
109.1 +12%
Multifamily Housing 60.3 -13%
21.2 +18%
26.6 +26%
33.5 +26%
Public Works 121.3 +8%
119.6 -3%
102.2 -15%
97.5 -5%
Electric Utilities 19.0 +7%
28.5 +35%
42.5 +49%
34.0 -20%
U.S. Total Construction Starts for 2012
15 15 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Billions of Dollars 2007 2010 2011 2012
Total Construction 640.9
431.2 +1%
426.4 -1%
433.6 +2%
Commercial Bldgs. 100.7
41.7 -59%
44.9 +8%
49.3 +10%
Institutional Bldgs. 117.7
110.8 -6%
97.1 -12%
95.0 -2%
Multifamily Housing 60.3
21.2 -65%
26.6 +26%
33.5 +26%
Single Family Housing 201.2
100.0 -50%
97.6 -2%
109.1 +12%
Total Vertical Buildings (Commercial and Residential)
479.9
273.7 -43%
266.2 -3%
286.9 +8%
U.S. Total Construction Starts for 2012
16 16 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
2005 2008 2010 2015
= Nonresidential Market
$172 billion
$3 billion 2% of
market
$54 billion 38% of market
$212 billion = Green Market
$153 billion
$255 billion
$25 billion 12% of market
Source: Green Market Size: 2011Green Outlook Report, McGraw-Hill Construction; base value of construction market from McGraw-Hill Construction Market Forecasting Service, updated February 2012
2015 Offers Significant Opportunity for Green Building in Nonresidential Starts
$142 billion
$47 billion 31% of market
$122 billion 48% of market
2011
17 17 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
A Green Building Project is… All green building
projects are energy-efficient projects
One built to LEED or other green building standard
OR Is Energy-efficient and Water-efficient
as well as… – Resource-efficient (e.g., recycling, reuse,
rapidly renewable materials) AND/OR – Improves indoor air quality
McGraw-Hill Construction Definition
18 18 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Education Construction: Total and Green Share
• Portland, OR: Oregon Health & Science University Life Sciences Building; $194M (LEED Gold); 2012
• New Haven, CT: Yale School of Management; $189 M (LEED Certified); 2011
• Binghamton, NY: State University of New York Binghamton East Campus Housing Dormitories; $140 M (LEED Gold); 2011
Examples of Large Green Education Projects
0
10
20
30
40
50
60
2008 2010
$ bi
llion
s
Education
Green Share
$58 billion
15% of market
$47 billion
$17 billion $9
billion 36% of market
Green Building Share of Education Starts
2011 Final $42 billion $19 billion
45% of market
Billions of Dollars 2007 2008 2009 2010 2011 2012
Education 53.2 +7%
58.0 +9%
48.4 -17%
47.1 -3%
41.9 -11%
40.6 -3%
19 19 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Healthcare Construction: Total and Green Share Billions of Dollars 2007 2008 2009 2010 2011 2012
Healthcare 24.4 +1%
30.0 +23%
20.4 -32%
24.2 +19%
22.5 -7%
23.0 +2%
0
5
10
15
20
25
30
2008 2010
$ bi
llion
s
HealthcareGreen Share
$30 billion
13% of market
$24 billion
$8 billion $4
billion 33% of market
Green Building Share of Healthcare Starts
• Dallas TX: Parkland Hospital; $690 M (LEED Silver); 2010
• Celebration, FL: Nicholson Center for Surgical Advancement; Barton Malow Company$13 M (LEED Silver); 2012
• Little Rock AR: Southwest Health Unit; $1 M Heiple + Wiedower Architects (LEED Certified); 2012
Examples of Green Healthcare Projects in the South
2011 Final $22.5 billion
$8 billion
35% of market
20 20 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Office Construction: Total and Green Share
• Cambridge, MA: Biogen Idec New Office Building; $150 M (LEED Silver); 2012
• Melville, NY: Canon USA Corporate Headquarters; $636 M (LEED Silver); 2010
• Plainsboro, NJ: Novo Nordisk American Headquarters; $150 M (LEED Certified); 2011
Examples of Large Green Projects in the Northeast
Green Building Share of Office Starts
0
5
10
15
20
25
30
2008 2010
$ bi
llion
s
Office
Green Share
$28 billion
30% of market
$17 billion
48% of market
$8 billion
$8 billion
Billions of Dollars 2007 2008 2009 2010 2011 2012
Office 32.6 +7%
27.8 -15%
20.2 -27%
16.8 -17%
16.1 -4%
17.5 +9%
2011 Final $16 billion $8 billion
50% of market
21 21 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
ENR Top 100 Green Firm Lists Show Green Revenues Nearly Doubling Over Last 4 Years
Source: Engineering News-Record, Top Green Design Firm List, 2008 and 2011, based on revenues of green projects reported by design firms in the U.S. in 2007 and 2010 respectively.
Firm Revenue
from Green Projects
Green Share of
Total Revenue
#1 HOK St. Louis, MO $151.5 M 23%
#2 URS Corp. San Francisco, CA $150.8 M 3%
#3 Gensler San Francisco,CA $126.6 M 19%
#4 HKS, Inc. Dallas, TX $115.0 M 30%
#5 Fluor Corp. Irving, TX $92.5 M 3%
TOTAL $636.4 M
Top Five Green DESIGN FIRMS 2008
Firm Revenue
from Green Projects
Green Share of
Total Revenue
#1 URS Corp. San Francisco, CA $333.2 M 7%
#2 Gensler San Francisco, CA $321.5 M 49%
#3 AECOM Los Angeles, CA $192.5 M 3%
#4 Perkins+Will Chicago, IL $171.5 M 43%
#5 HOK St. Louis, MO $158.2 M 34%
TOTAL $1,176.9 M
2011
22 22 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Source: Engineering News-Record, Top Green Contractor List, 2008 and 2011, based on revenues of green projects reported by contractors in the U.S. in 2007 and 2010 respectively.
Top Five Green CONTRACTORS 2008
Firm Revenue from
Green Projects
Green Share of
Total Revenue
#1 Turner New York, NY $4,229.1 M 56%
#2 Gilbane ** Providence, RI $2,541.7 M 85%
#3 Clark Group Bethesda, MD $2,408.9 M 53%
#4 Hensel Phelps Greeley, CO $2,026.2 M 80%
#5 Tutor Perini Sylmar, CA $1,678.0 M 53%
TOTAL $12,883.9 M
2011
Firm Revenue from
Green Projects
Green Share of
Total Revenue
#1 Turner New York, NY $1,808.1 M 19%
#2 Webcor San Mateo, CA $1,604.8 M 79%
#3 Skanska USA Whitestone, NY $1,242.3 M 22%
#4 Bovis Lend Lease New York, NY $1,075.5 M 20%
#5 Swinerton San Francisco, CA $1,046.0 M 52%
TOTAL $6,776.7 M
#9 Gilbane Providence, RI $651.9 M 22%
ENR Top 100 Green Firm Lists Show Green Revenues Nearly Doubling Over Last 4 Years
23 23 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Appearance of LEED In Project SpecificationsNumber of Projects versus Value of Projects
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007 2008 2009 2010
Spec
ifica
tion
Rat
eLEED Has Influenced Green Building Market Beyond Certification
Projects
Dollar Value
25 25 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Large firms are moving exclusively toward green business
Focus on the following to gain green work: – Office: Driven by competitive advantages,
transparency rules and wellbeing • Highlight how your products/services improve
asset value and building performance • Be able to address attributes of products/ impact of services
– Education: Shift fully to green in 10 years, driven by wellbeing, operational cost savings/durability and demands of the next generation
• Have figures on utility savings • Provide information on connections of services to occupant well-being
– Healthcare: Heavy growth from need for energy savings and health improvements
• Offer energy savings data of products/services • Provide health effects and benefits of products/services
U.S. Construction Outlook and Green Building Market Opportunity Key Takeaways
Turner Construction Example:
• Over half of work green
• 200 LEED certified projects (through 2010)
• 250 for 2011 (actual) and 2012 (planned)
26 26 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
U.S. Green Retrofit & Renovation Market
27 27 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Most Commercial Projects Retrofit & Renovation
Source: McGraw-Hill Construction, Construction Starts Database, 2006-2011
Commercial Construction Based on Value Started (2006 - 2011)
0%
10%
20%
30%
40%
50%
60%
70%
80%
2006 2007 2008 2009 2010 2011
Perc
enta
ge
RenovationNew Additions
Commercial Construction Based on Number of Projects Started (2006 - 2011)
0%
10%
20%
30%
40%
50%
60%
70%
2006 2007 2008 2009 2010 2011
Perc
enta
ge
RenovationNew Additions
28 28 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
$44.1
$57.5
$0
$20
$40
$60
2010 2015
Bill
ions
Source: Green Outlook 2011, McGraw-Hill Construction Dodge Analytics, 2010
GREEN SHARE
High
Low
$4.4 (10%)
$14.4 (25%)
$19.0 (33%)
Projected Major Renovation/Retrofit Market Size for Energy Efficiency
ENERGY-EFFICIENCY
SHARE
$29.1 (66%)
$51.7 (90%)
$43.1 (75%)
& Green
29 29 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Influencing Green Retrofit Purchasing Decisions of Building Managers
15%
37%
37%
26%
35%
59%
87%9%
13%
2%Public Pressure
Tenant Demand
LEED-EBConsultant
ManagementCompany (e.g.,
CBRE)
Building Owner
Influential
VeryInfluential
96%
50%
17%
72%
85%
Important to target more than just
building owners to influence the green
building purchasing
decisions for tenant improvements
Source: Business Benefits of Green Buildings SmartMarket Report, McGraw-Hill Construction/CBRE, 2010
30 30 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
What Do Owners Value When Making High Performance Retrofits? It Depends on the Goal…
To Increase PERFORMANCE…
To Increase ASSET VALUE…
To Meet SUSTAINABILITY Objectives…
Source: Survey of existing building owners (office, higher education, healthcare), Siemens/MHC (October, 2011)
31 31 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Increased Building Values: Improvement in ROI: Increased Occupancy: Rent Rise: Decreased Operating Costs:
2009 4.8% 4.1% 5.3% 1.0% 8.0%
2010
*Higher ROI expected in 2009 Study versus 2010 Study due to the inclusion of some Class B upgrades to Class A buildings, where ROI improvement would be greater Note: 2009 & 2010 retrofit surveys include similar populations of commercial building owners
MHC Green Retrofit SMR
CBRE/MHC/ USD survey
6.8% 19.2%* 2.5% 1.0% 8.5%
Business Benefits of Building Improvements (according to Office Owners)
10% 13% 16% 13% 10% (1 yr) 16% (5 yrs)
2011
Siemens/MHC survey
Green Improvements
Performance Improvements WINDOWS, DOORS, CARPET,
AUTOMATED BLDG SYSTEMS…ETC.
Higher Education: 15% higher
ROI
Healthcare: 18% higher
ROI
32 32 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Important to target more than just building owners to influence the green building purchasing decisions for tenant improvements
Find the motives driving decisions—and then make the case using the appropriate metrics
Be able to connect your products/services to business benefits, including:
– Operating cost savings
– ROI and building value
– Occupant benefits
U.S. Retrofit/Renovation Market Opportunity Key Takeaways
33 33 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
U.S. Green Residential & Remodeling Market
34 34 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
2005 2008 2016
= Single Family Residential Market
$315 billion
$6 billion 2% of
market
= Green Market
$98 billion
$300 billion
$10 billion 8% of market
Source: Green Market Size: calculation McGraw-Hill Construction; base value of construction market from McGraw-Hill Construction Market Forecasting Service, as of February 2012
2012–2016 Offer Significant Opportunity for Green in Single Family Starts (New Homes)
$145 billion
$17 billion 17% of market
2011 2013
$122 billion
$32-$36 billion 22%-25% of market
$87-$114 billion 29%-38% of market
Five-Fold Increase from 2011
35 35 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
17% of builders
19% of builders
33% of builders
New Home Builders Focus on Green Is Strong and Growing
2005 2011 2016
Source: Green Home Building survey, McGraw-Hill Construction, December, 2011
2013
Less than 16% of projects green
16%-30% of projects green
31%-60% of projects green
61%-90% of projects green More than 90% of projects green
20%
40%
60%
80%
100%
20%
40%
60%
80%
100% Study sample represents over 23,000 NAHB
builders and remodelers doing green
36 36 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
$0
$20
$40
$60
$80
$100
$120
$140
11%
11%
14%
20%
20%
45%
34%
43%
77%
65%
34%
22%
78%
66%
35%
23%
Source: Remodeling Market (2009 & 2011, Harvard Joint Center on Housing Studies, Leading Indicator of Remodeling Activity (Q4 2011); 2013-2016 (estimate based on compounded annual growth rate of 3.5%)). Share of green: Green Home Building survey, McGraw-Hill Construction, December, 2011
2011 2009 2016 2013 2009 2016 2013
Home Remodeling Market and Share of Green on the Rise
Home Remodeling Market 2009 to 2016 (projected) ($ billions)
More than 60% of projects green
16%–60% of projects green
Less than 16% of projects green
$130 billion
37 37 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
More than 60% Find Customers Are Willing to Pay More for Green
31%
28%
18%
4% 9% 16%
41%
30%
Builders
Average – 3%
Dedicated Green Average – 6%
31%
28%
7%
Remodelers
Average – 5%
Dedicated Green Average – 6%
18%
18%
16%
18%
61% 66%
Source: Green Home Building survey, McGraw-Hill Construction, December, 2011
38 38 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Green has been the silver lining in the downturn for home builders
Gain opportunity in the market by highlighting the following for builders/remodelers:
– Experience in green
– Payback benefits of your services/products
– Ability to help the builder/remodeler make case to the homeowner
Educate non-green builders on the advantages of green to help them get more business
Include remodelers as target customers—their involvement in green is increasing at a faster rate
Green Residential and Remodeling Market Opportunity Key Takeaways
39 39 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
Concluding Thoughts
40 40 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
The construction market will improve…but slowly
On the other hand…the green building market is growing dramatically:
– Nonresidential green will be 48% of new construction by 2015
– Single family green homes up to 38% of new homes by 2016
Tangible business benefits—such as ROI, occupancy and rent increases—from green are reported by commercial building owners…and consistent over time
Green intersects with other major construction industry trends—so tracking overall trends is critical
Conclusions: Green Building is Providing Market Opportunity
41 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
70
85
100
115
130
145
160
175
190
T T+2 T+4 T+6 T+8 T+10 T+12 T+14 T+16 T+18 T+20 T+22
1982-91
1975-82
Based on Constant DollarsCyclical Trough (T) = 100, as determined by Total Construction pattern
Years from Cyclical Trough
Nonresidential Building by Cycle
1991-2011
A new cycle emerging? The cyclical nature of business & construction
Trends
US & Global – Sustainability/Green Building – Interoperability and BIM – Workforce/Labor – Innovation – Materials – Project Delivery Methods
“Overall, industry specific innovation does not follow,
but creates expansion” “The Instability of capitalism”
- Joseph Schumpeter – 1928
43 43 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved.
The McGraw-Hill Companies – Essential Information & Insight
Education
Financial Services
Information & Media
McGraw-Hill Education
McGraw-Hill Financial Standard & Poor’s
J.D. Power and Associates McGraw-Hill Construction Platts Aviation Week
280 offices in 40 countries. Leader in every market we serve.
43 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.
44 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2012. All rights reserved. Author - Topic - Date of Production