Dramatic Growth in Green Building Expected Globally in the Next Two Years
Green building is expected to continue to grow globally at a high rate, especially but not exclusively in developing countries, according to the World Green Building Trends 2016 SmartMarket Report, a new report from Dodge Data & Analytics. The study, conducted with support from United Technologies Corp. (NYSE:UTX) and its UTC Climate division, along with Saint-Gobain, USGBC and the Regenerative Network, features findings from 1,026 respondents from 60 countries. Sufficient responses were received from respondents from 13 countries to allow for a statistically significant analysis and special sections in the report devoted to these markets or their larger regions: US, Mexico, Brazil, Colombia, South Africa, UK, Germany, Poland, Saudi Arabia, Singapore, Australia, China and India.
Green Building Market Activity
Twelve out of the 13 countries included in the study expect to see a strong growth in the next two years in the percentage of respondents who do more than 60% of their projects green. This demonstrates the importance and strength of green building as a global market, but there are regional differences.
• Most developed green markets report healthy growth. The percentage of respondents doing green at that level in the US market expects to grow by more than one third, while the percentage in the UK and Germany expect to nearly double. Australia is the only market with little growth in dedicated green players.
• The most dramatic growth, though, is expected in many developing countries, including South Africa, India, China and Saudi Arabia.
Influences on Green Building Markets
The study confirms the finding from 2012 that market forces, rather than ‘doing the right thing,’ are generally more important drivers of green building globally. However, environmental regulations jumped in importance between 2012 and 2015, driven largely by responses from the UK, Singapore and India.
Reducing energy consumption is universally recognized as the top environmental reason for building green by all thirteen countries highlighted in the study. In the US, Germany, Poland and Singapore, it is the dominant reason for building green. However, protecting natural resources, which ranks second globally, is nearly as important as energy in Brazil, Colombia, Saudi Arabia, South Africa, Australia, China and India.
The perception that green building has higher first costs is still widely recognized as the top obstacle for building green. For many developing markets, lack of public awareness and lack of political support are also important obstacles. For more developed markets, the perception that green building is primarily for high-end projects is an important obstacle.
Business Benefits of Green Building
The 2015 study confirms the strong business benefits reported in the previous study in 2012, with median reductions in operating costs reported to be 9% for both new green buildings and retrofits. However, owners now report a 7% increase in asset value compared to traditional buildings for both new green buildings and retrofits, compared with 5% and 4%, respectively, in 2012. The perception of the greater value of the building itself can be a critical factor driving owners to invest in green.
