Essential Insights for Government
Green Building: An Increasingly
Important Way of Doing Business
For years we in the design and construction industry have discussed
the emerging green building trend. In October at the McGraw-Hill
Construction (MHC) Outlook, our Chief Economist, Robert Murray mentioned
green building as a macroeconomic trend in the construction industry,
and AIAs Chief Economist Kermit Baker stated that energy efficient
products were overwhelmingly seen as increasing in residential construction.
With energy prices remaining high, we can only expect references
to green building to continue to increase.
It seems an opportune time to dedicate this issue of the Construction
Industry Intelligence Report to green building trends and case studies.
We recently released our Green Building SmartMarket Report,
and with it, we have tangible data about the market, demonstrating
green design is an increasingly important way of doing business.
We found there is overwhelming participation in the industry: over
85% of a representative sample of architects, engineers, contractors,
and building owners report involvement in green building activities.
We found that the motivations to build green are as influenced
by a desire to do right as well as by perceived improvement
to the bottom line.
And there is agreed consensus about green buildings expected
Operating cost reductions of
8% to 9%
Building value increases of 7.5%
ROI improvements of 6.6%
Occupancy increases of 3.5%
Rent increases of 3% on average
Groups such as the American Institute of Architects, U.S. Green
Building Council, and National Association of Homebuilders are leading
the charge, dedicating themselves to educating the public and motivating
change throughout the construction industry. Industry leaders such
as Turner Construction, PNC Financial Services Group, and a wealth
of product manufacturers are adopting sustainable practices. And
government at all levels is committing itself to practicing what
it preaches by adopting green building principles into its way of
it to say, green building is not a fad. It is here to stay, and
we are excited at the opportunities it will bring to our
The aforementioned statistics as well as the
displayed charts and graphs can be found in the Green
Building SmartMarket Report 2006. For information on how
to get a copy, go to www.greensmartmarket.construction.com
Energy Efficiency Drives Sustainable Building Practices
Insulated Exterior Doors
Source: McGraw-Hill Construction, 2005
2. Energy Efficient
3. Reduced Water-Used Fixtures
4. Improved Insulation
5. Energy Star Rated Appliances
According to McGraw-Hill Constructions annual homebuilder
survey, energy efficiency drives most green building in the residential
Results indicate the following:
62% consider energy efficient technology
the most important aspect of
Higher energy cost is the most frequently
cited reason for implementing
green building into homes.
The Energy Star label - a program focused
on energy efficiency - is the most
frequently used method for identifying
green building products in the home.
McGraw-Hill Construction is currently in the process of identifying
the market trends in residential green building, modeling the research
after that used to evaluate the commercial green building market
and detailed in the Green Building SmartMarket Report 2006. The
results will be available late spring/early summer, 2006.
McGraw-Hill Construction issues Residential
Building Product Usage Reports based on the results of its
annual homebuilder and remodeler surveys. To find out more, visit
Construction and U.S. Department of Labor:
Encouraging Skills to Build Americas Future
The construction industry has long had a need for workers to fill
jobs. At the same time, the industry is facing increased pressure
to fulfill demand, and recent hurricane recovery efforts have placed
additional burden on an already pressured industry.
In order to encourage tomorrows workforce to understand the
opportunities and exciting challenges in the construction and energy
industries, McGraw-Hill Construction has worked under contract by
the U.S. Department of Labor and DTI Associates, Inc. to produce
and release InDemand, a magazine designed
to educate todays teens about career opportunities. The first
issue focused entirely on construction industry opportunities, while
the second focused on careers in energy.
magazine features information on the industry, overviews of wages
for various professions, profiles and interviews with professionals
in the industry, a map of how professionals work together and the
role each profession plays, an article on future trends or technology,
two pages of fun facts, and resource lists. Additionally, at the
back of each book is information on mentors, including tips for
guidance counselors and teachers. The magazines conclude with a
letter to parents on ways to engage their teens in talking about
future career opportunities.
To read InDemand
Average Annual Salaries
for Construction Professionals
|Top Five Average Annual
for Skilled Crafts
Average Annual Salaries for
|General & Operations Managers
|Wages, salaries vary by region
Source: U.S. Dept. of Labor, Bureau of Labor Statistics
In order to make its products more accessible,
McGraw-Hill Construction launched a new online store at www.analyticsstore.construction.com,
dedicated to providing access to more than 8,000 separate analytic
particular, this new store provides easy access to lower-priced
items that can give forecast or historical information on a state
or metro area or a snapshot of a particular market, such as green
building or healthcare.
New Green Source website online
New green magazine to launch in Spring
McGraw-Hill Constructions new Green Source website
allows everyone involved in environmentally responsible construction
access to news, feature articles, best practices for architecture,
and product information published by Architectural
Record, Engineering News-Record,
Sweets, and other McGraw-Hill Construction
Additionally, this spring, McGraw-Hill Construction will be launching
a new publication, bringing all players in the design and construction
industry the latest, most comprehensive information on designing
and constructing environmentally responsible buildings.
To find out more on how to subscribe to the
new magazine or for information on editorial features, email Construction_Intelligence@mcgraw-hill.com.
For information on advertising, email ARadvertising@mcgraw-hill.com
Improving the Energy
Performance of Green Buildings
When the High-Performance Buildings Group at the National Renewable
Energy Laboratory (NREL) recently completed evaluation studies of
six newly constructed high-performance buildings, it determined
that although the buildings did save a significant amount of energy,
they weren't saving as much energy as the group had predicted. NREL
researchers set up sophisticated building monitoring systems in
an effort to pinpoint what went wrong in these buildings, how the
performance of the buildings could be improved, and how to prevent
such shortfalls from happening again.
In the six buildings evaluated by NREL's researchers, photovoltaic
(PV), daylighting, and HVAC systems were not consistently performing
as well as they should have. There are a mix of reasons for these
buildings not meeting their performance targets:
Photo Courtesy: NREL
|The Thermal Test Facility at NREL (above)
is one example of a building with a successful daylighting strategy.
The building features a limited amount of glazing and a stepped
design, which reduces potential glare problems. The space inside
feels natural and is sufficiently lit.
McGraw-Hill Constructions new Architect
Panel can be used to conduct research on the preferences,
decisions, and products architects are using as well as trends
in the design and construction industry. Call 800.591.4462
or e-mail firstname.lastname@example.org
for more information.
It is difficult to accurately predict building uses.
The various professionals in the construction and design
process don't always communicate effectively with each
It's often hard to do accurate modeling.
Conflicting design priorities can cause designers to stray
from energy performance goals.
PV systems can be poorly implemented.
Daylighting can be difficult to get right (see figure).
There is often a lack of occupant and operator training in
using new systems.
Although the NREL inquiry was focused on these six green buildings,
the lessons apply to all building projects that incorporate new
Platts E Sources research analyzed the NREL findings and
offered specific recommendations on green building, namely that
parties involved in green building projects should ensure these
buildings perform as expected. The occupants are likely to pay more
attention to energy performance goals and actual energy use than
occupants of conventional buildings. E Source believes a central
coordinator overseeing every building project from inception to
post-occupancy is essential and could monitor building performance
on a regular basis to ensure that all systems continue to work efficiently.
This strategy will vastly increase the likelihood that buildings
will perform up to expectations, which is crucial for sustaining
the value of green buildings over time.
For more information, please visit www.greenbuildings.platts.com.
Making Daylighting Systems
Daylighting systems, which use natural lighting to supplement electric
lighting, have the potential to cut energy use, reduce peak demand,
and create a more desirable indoor environment, yet these systems
often fail to live up to their potential. Researchers at The Weidt
Group, who have studied more than 100 daylighting systems for a
variety of building types, found that automatic switching or dimming
control systems often don't provide the expected energy savings.
Yet some daylighting systems work well, cutting lighting energy
use by 20 to 80 percent and offering intangible benefits as well.
The key to getting more systems to live up to their potential lies
in combining good design with commissioning, effectively coordinating
the efforts of many building disciplines, and training building
occupants in how to use the systems. This includes incorporating
more-effective products that are either already available or soon
to come to market.
Photo Courtesy: Lighting Research Center
Daylighting measures implemented at Smith Middle School in Chapel
Hill, North Carolina (right), cut lighting energy use by an estimated
64 percent as compared with a computer simulation of that same facility
built to code without daylighting.
For more information, please visit www.esource.com.
Construction Outlook for
The disruption caused by Hurricanes Katrina and Rita has reduced
economic growth in the final months of 2005, but will be a net positive
in the early months of 2006 as reconstruction efforts get underway.
In addition to reconstruction, decent job growth will support the
demand for offices and multifamily housing, the improving fiscal
health of state governments will boost public institutional projects,
and the new federal transportation legislation will speed funding
to local highway and bridge projects. The only negatives facing
the construction industry in 2006 will be the rise in long-term
interest rates and higher construction materials prices.
On balance, new construction starts are expected to grow 3% in
2006 to $654 billion.
Housing will retreat from a record 2005, due to moderately higher
mortgage rates and overpriced housing markets. Institutional building
will rise in 2006 as the gradual upturn in the fiscal health of
states, combined with the money coming from the huge amount of bond
measures passed in recent years, help school construction see growth.
Finally, electric utilities will essentially stablilize after the
steep declines experienced from 2002-04 as the retrenchment for
power plant construction seems to have run its course.
To order a copy of the Outlook 2006 Report,
News-Records Award of Excellence
New York, NY
To receive information
as it becomes available, email Chuck_Pinyan@mcgraw-hill.com
Office Construction Expected
to Improve in 2006
|This information is contained in the Construction
Market Forecasting Service (CMFS). For information on
CMFS or to order a copy, call 800.591.4462 or order online at
The demand side of the office building market is not only in good
shape, it's improving. Office employment, the key to the health
of office demand, has been performing exceedingly well. According
to Economy.com, national office employment reached 28.6 million
in December of 2005, surpassing the previous Internet-driven peak
of 28.3 million set in February of 2001. Economy.com estimates that
office employment will grow another 3% in 2006.
Yet despite indications of healthy demand fundamentals, 2005's
office construction market failed to recapture the growth of 2004.
2005's more reserved construction occurred because a fewer number
of truly immense projects reached the start phase. Firms hired at
a solid pace, but remained uncertain about the future, and therefore
were cautious about large expenditures.
The outlook for 2006, according to McGraw-Hill Construction, is
more upbeat: construction starts will grow 9% to 172 msf. With office
employment holding at historically healthy levels, corporations
will find they must expand their office space to make room for the
growing ranks of employees. Overall, the recovery will be more modest
than in prior years, and office construction will not approach anywhere
near the 2000 pinnacle of 300 msf.
Federal Legislation &
Reconstruction To Further Lift
Infrastructure Spending During 2006-2007
Ranked by Dollars
with preliminary data from 12/2005
4. New York
9. New Jersey
Source: McGraw-Hill Construction,
The new year will bring with it increased spending on transportation
and environmental infrastructure. The passage of the six-year $285.9
billion "Safe, Accountable, Flexible and Efficient Transportation
Equity Act, A Legacy for Users" in late 2005 will support higher
contracting for highways and bridges. Capital spending on drinking
water, wastewater, and water resource projects is rising as well.
Awards for drinking and wastewater projects are benefiting from
the need to replace aging facilities, upgrade treatment plants to
meet EPA mandates and accommodate growing demand from both businesses
Last summer's hurricanes are pushing activity higher. McGraw-Hill
Construction conservatively estimated that rebuilding the roads
and bridges damaged by Katrina would require between $1.5 billion
to $2.0 billion and that the reconstruction of the levees and floodwalls
around Orleans Parish would cost nearly that much. Public works
construction in the South Central will increase 15% in 2006 with
the percentage gains in contracting for dams, river, shoreline,
and flood control projects nearing 50%.
This information is contained in the Construction Market Forecasting
Service. For a more extensive analysis of the outlook for highways
and bridges over the next five years, call 800.591.4462 or order
online at www.analyticsstore.construction.com.
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