ANALYZING AND FORECASTING CONTRACTORS’ GREEN BUILDING REVENUES

Abstract

The sustainability movement is increasingly impacting the construction industry, which has been quick to adopt innovative methods to deliver sustainable facilities. The literature shows that energy consumption in the building sector is increasing at a rate comparable to those of industrial and transportation sectors, and that buildings are responsible for close to 40 percent of energy use and 74 percent of electricity retail sales. Numerous studies also show that this sector has high potential for energy savings and pollution reduction. There is an opportunity for stakeholders of the architecture, engineering, and construction industry to increase their revenues in delivering green buildings. Accordingly, this study presents quantitative analyses of green contractors’ market performance in terms of topline revenue. More than a decade’s worth of business data was used to perform statistical analyses to gauge and discover the green building construction revenue growth over the past decade, uncover trends and develop a forecasting model for the next decade. Results indicate that there is an average 3.7 percent growth in green building revenue on a yearly basis, and that green building revenue constitutes about 35 percent of the total revenue for the top 100 green building contractors, with an expected increase of $3 billion every year. Such findings give researchers a retrospective look at the green contractors’ market performance to investigate the underlying reasons for such significant growth, while also providing practitioners with a forecasted growth rate informing their decision to grow their green building business.