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Over 320 industry professionals from the construction industry flocked to the McGraw-Hill Construction Outlook Conference on October 19, 2011 to hear the state of the industry. Product managers, construction managers, marketers, and analysts received grim news from Bob Murray, the Vice President of Economic Affairs at McGraw-Hill Construction – the construction industry is to remain flat in 2012.
“In 2012, the top-line numbers are not expected to show much change, but there will be variation within the major construction sectors, with some gains predicted for housing and commercial building assuming the U.S. economy avoids recession,” said Murray.
The McGraw-Hill Construction Dodge Outlook report shows that while housing and commercial building construction starts may improve, it will be offset by weakness in the public works and institutional building sectors.
“The pattern of institutional building tends to follow the pattern of the economy,” Murray said. But according to Michele Russo, the director of communications at McGraw-Hill, the green construction industry is still doing pretty well. While office buildings and education buildings have contracted, the healthcare industry has done really well because of the Boomer population and is an opportunity for green building. At Greenbuild, Russo and her team announced findings from a green workforce study indicating that 661,000 construction jobs are currently “green.”
“In 2005 it was 2% of the market and now it’s about 1/3,” Michele Russo. “Once it gets to half of the market it gets to a sticking point…what we consider green right now will be just part of design.”
Russo has reason to be optimistic. According to a McGraw-Hill study, 45% of AEC firms expect to have green jobs by 2014, and 42% of respondents agree that green jobs yield advantages such as more opportunity (42%) and better career advancement.
Thus, finding workers trained in environmental technology and materials that adhere to the latest environmental standards is no longer a problem. Russo says that…
Bill Alsup, the Senior Vice President at Hines, which is in charge of the new CityCenterDC project agrees.
“There wasn’t really any challenge making it green,” Alsup said. “Once we knew what the city wanted, we just did it.” Alsup is an example of how far we have gone in environmental technology in the last couple of years. The CityCenterDC project’s office buildings are expected to receive Gold certification. The residential buildings are targeting a LEED Silver rating.
At the same time, Russo acknowledges that access to capital is still a problem. While the 2009 Recovery Act allocated millions of dollars to greening government infrastructure, the private sector hasn’t had those kinds of resources. Russo says that for these private companies, the motivation for green innovation lies mostly in the business side of things.
“Particularly in this economy, producers are looking for a way to differentiate,” Russo said. As a result, the industry is shifting towards more transparency in the form of energy transparency. For example, more and more businesses are issuing Environmental Product Declarations – EPDs. An EPD is a standardized tool to communicate the environmental performance of a product or system, and is applicable worldwide for all interested companies and organizations. The declaration includes information about the environmental impacts associated with a product or service, such as raw material acquisition, energy use and efficiency, content of materials and chemical substances, emissions to air, soil and water and waste generation.
Once this data becomes more available, it will provide incentives for other businesses to invest in green technologies as well. Once the upfront costs are paid, Russo says, businesses have reported a “tremendous…payback, returns any where from 2-4% and the operating costs decreases in the double digits.”
So while the federal government is mired in controversy and debt, it seems that the onus is now on the private industry to continue green innovation. It may be slow in coming, but industry analysts like Russo are confident that it will happen.
