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Green Offers Opportunity

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Green and Non-Residential Combine to Offer Opportunities In 2008

Recent market research indicates the green building movement is continuing to grow. Results from FMI’s 2008 U.S. Construction Overview suggest that the green movement may offer dealers and distributors opportunity, even in a slower residential market.

According to the Raleigh, N.C.-based management consulting practice’s report, the National Association of Home Builders Green Building Conference, in April 2007, revealed that green building and remodeling is experiencing a level of demand that exceeds the current supply of qualified firms. In fact, the overview indicates that, while demand for traditional residential construction is slowing down, the green housing and materials markets are actually expanding. FMI’s report indicates that homeowners are increasing their investment in sustainable housing due to improved economic paybacks resulting from high energy prices and their growing sensitivity to environmental concerns. For this reason, the company suggests that green building is no longer a niche sector.

“Green building will continue to grow,” says Rick Dutmer, consulting group manager for FMI. “It is not a question of whether your firm should invest in understanding the green sustainable trend and how to produce sustainable projects, it’s how much should you invest and how fast.”

Bridging the Gap
The increased level of demand for green products, combined with a strong non-residential market could offer dealers an opportunity to fill the gap until residential construction rebounds. According to FMI’s overview, green nonresidential construction put in place was $13.4 billion in 2006 and by 2008 $21.2 billion of all new nonresidential construction will employ the use of green building principles. In 2008, FMI suggests the three largest segments for nonresidential construction green building include: office, education and health care. These three segments will account for more than 80 percent of total nonresidential green construction. Other segments such as lodging and commercial are also experiencing green construction growth, with a 20 percent gain expected from 2007 to 2008.

Three Driving Factors
FMI reports that three major trends are pushing green building to the forefront of the construction industry’s consciousness: an unprecedented level of government initiatives; heightened residential demand for green construction; and improvements in sustainable materials.

The report indicates that green materials and building products are becoming more popular as consumers are becoming more knowledgeable about their health and the environment. Consumers are now questioning the volatile organic compounds (VOCs) in their carpet, paint and wood and they are making a conscious effort to identify what building materials are healthier, more energy efficient and economically sensible. FMI also credits improved distribution outlets for helping create greater demand.

FMI’s 2008 U.S. Construction Overview has been published annually since 1977. It offers a comprehensive report on vital construction trends and forecasts the growth or decline in each market segment and geographic region, noting both short-term and long-term considerations. For more information, visit www.fminet.com.

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