Green Building Contractors 2025: Analyzing and Forecasting Green Building Contractors’ Market Trends in the US

Abstract

With population growth, the demand for building construction is continuously increasing. This comes at the price of the built environment where the building sector is contributing to large energy consumption and carbon footprint releases. To encourage sustainable construction, contractors need to see the market benefit of “going green”. Previous studies of green building contractors (GBCs) mainly relied on qualitative discussions and lacked studying the market performance which drives contractors’ decisions the most. This paper collects GBC revenue data from the Engineering News-Record magazine for the top 100 GBCs over a 13-year period and performs trend analysis to assess the market performance of GBCs and time series analysis to forecast future revenues. In addition, k-means clustering technique was used to divide the firms into subsets of similar behavior to understand growth trends for different firm sizes. The results show a continuous increase in green building revenues (GBRs), where commercial office buildings contribute the most to it. Furthermore, the firm ranks responsible for most of the growth are identified; mainly the top 9. Predictions show the expected steady increase in GBR in the upcoming years which is anticipated to reach 83 billion USD in 2025. The findings inform contractors considering executing green buildings by understanding the market trends and forecasted revenues. Moreover, contractors who are already in the green building business can use this information to increase their revenues in their respective market subset.

1. Introduction

Several studies have shown the rate at which humans are harming the environment they are living in with new technologies and arising industries. For example, the total US energy consumption reached a very high level in 2018 of 101 quadrillion British thermal units [1].

Considering the constant growth in population, sustainable construction of buildings is expected to be a great contributor to sustainable development (SD). Statistics show that the building sector is responsible for 55% of annual global electricity consumption, and about 40% of annual global CO₂ emissions divided between building operations (28%) and building materials and construction (11%) [2]. Construction goods account for 40% of the greenhouse gas emissions (GHGE) from global materials production [3]. Cement and concrete are identified as the worst materials in terms of carbon dioxide emissions and depletion of fossil energy resources, and they are the most used materials in construction [4]. Construction materials cause a high percentage of GHGE in the world [5]. Hence, the building sector presents itself as a highly influential candidate to start implementing sustainable construction practices. To minimize the negative impacts on the built environment, owners and contracting firms must be interested in efficiently investing in and executing sustainable projects.

2. Literature Review

2.1. Sustainable Development and the Business Aspect of Green Buildings

Some research efforts investigated the practical business aspect of green buildings from different angles. An interesting study in South Africa shows that the need for green buildings exists due to economic factors such as reducing the cost of energy, being recognized by industry rating systems, and competitive advantages rather than ecological factors [6]. A recent study by Wang et al. investigated whether construction firms with good financial conditions devote more resources to environmental activities [7]. They concluded that financial performance does not significantly impact environment information disclosure (the metric they used to measure the firm’s environmental activities). Yan proposed a framework of market efficiency and performance measures to evaluate project-based competition mechanisms for sustainable developments in the building and construction sectors [8]. They analyzed the competitive market behavior under different awarding systems. However, they did not address economic performance. Economic pressures which represent the large environmental costs contractors are expected to bear when constructing while fulfilling environmental sustainability goals were found to be related to the level of contractor greenwashing behaviors [9]. Greenwashing often refers to misleading communication to gain unwarranted environmental legitimacy [10]. The findings from the recent study by Wang et al. highlight the importance of showcasing to contractors how they can overcome the economic pressures and benefit from an economic opportunity while avoiding greenwashing.

One economic study involved examining the activities specific to green buildings that are associated with transaction costs in the real estate development process [11]. Recommendations include that project managers pay attention to sustainability to minimize hidden societal costs. They also worked on referencing professionals who can aid in improving best practices of the green building market by optimizing the societal costs. Moreover, one interesting study performed a comprehensive review of research investigating the economic viability of green buildings including cost-benefit analyses considering building life cycle and major market participants [12]. They found that there is unclarity around the economic viability from the perspectives of developers and occupants driven by information, behavior, and policy factors. A similar conclusion was reached by a study conducted in the Italian real estate market to examine if green buildings can achieve higher prices and superior economic performance than traditional buildings [13]. They concluded that green buildings have higher financial performance due to the increase in revenue for selling at higher prices and due to favorable absorption rates (both significant). Yang et al. identified the local economic development level as one of the critical factors affecting green residential building development in China [14]. Guo and Yuan studied the correlation between the number of green residential buildings in China and 18 influencing factors covering the social economy and real estate market to encourage the development of green residential buildings [15]. These are a sample of international studies trying to investigate the business aspect of green buildings; yet they neither touch on contractor’s financial benefits nor cover the US region.

2.2. The Focus on Contractors

Most of the reviewed studies show how single or multiple stages of the building life cycle can be addressed theoretically. However, as owners decide to go for sustainable planning and design to satisfy green building rating systems certifications, they need to support this initiative by hiring contracting firms that follow sustainable construction best practices and regulations to receive these certifications. Hence, it is a joint effort between both contractual parties, which requires having all stakeholders interested.

Several studies investigated the factors that influence the stakeholders’ interest in investing in green buildings. For example, research shows that owners are driven by their internal incentives, such as the health and well-being of building occupants, rather than financial ones to adopt green building practices [16,17]. This comes with several tangible benefits to them, such as growing their reputation as advocators of the environment, resource use efficiency, increased marketability, and enhanced societal reputation [17,18]. Teng et al. found that market development environment and ecological value are significant direct drivers of sustainable development of green buildings [19]. The results support that owners’, designers’, and contractors’ willingness to “go green”, as part of the market driver, has the most significant impact on sustainable development. However, there was not enough evidence to support the influence of economic value on going green in buildings. Hence, more studies directed towards measuring the economic values to the stakeholders are needed to highlight the importance and influence of this factor.

Rakitta and Wernery studied the impact of cognitive biases on sustainability in buildings and showed that a default effect leads to a more sustainable building design by significantly decreasing building energy use, embodied energy, and carbon footprint [20]. However, contractors’ contribution remains somewhat behind due to a number of perceived challenges. These include increased time demand, fear of change, increased equipment and material costs, fear of auditing of construction documents, and lack of needed green expertise [21,22].

Research in Singapore showed that the top five critical risks in green residential building construction projects are complex procedures to obtain approvals, overlooked high initial costs, unclear owner requirements, employment constraints, and lack of availability of green materials and equipment [22]. Another study identified promotion strategies to encourage green building technologies (GBTs) in construction, which include financial and further market-based incentives for GBTs adopters, availability of better information on cost and benefits of GBTs, mandatory governmental policies and regulations, and green rating and labeling [23].

There were some studies exploring the roles of contractors in the successful implementation of green residential buildings; these include the competence of project managers, the coordination of designers and contractors, leadership and organization, target management, and emotional intelligence [24,25]. Other studies focused on how to enrich the contractor’s role by educating them about GBTs [23]. However, considering that a contracting firm is a profit-driven organization, few research efforts have studied the economic, financial, market, or business aspect of going green for contractors. This calls to start by studying contractors’ revenues to lure their interest into the green building industry and then resolve their perceived challenges of going green by studying their performance and understanding the difficulties they are encountering. In other words, to understand their perspective on green buildings is to be able to show them where they can be efficient and where they are stronger by revenue subgroups or building sectors. This is one way to help them enhance their “green” profiles and make them more appealing or “green building” qualified to be selected by other owners seeking green building development for future work.

3. Research Questions

3.1. Problem Statement and Research Gaps

The review of recent literature reveals several gaps relevant to the sustainable development of green buildings. First, there is more focus on the technical aspects and sustainable performance of green buildings than on the factors influencing the decision of going green. This means there is more focus on the impacts of going green than on the drivers of going green. Therefore, to promote the development of green buildings, there is a need to study the factors influencing the decisions of going green. Among these factors is the role of stakeholders and decision-makers. Some studies have investigated the role of investors, designers, and occupants in promoting sustainable development; however, there is limited focus on overcoming contractors’ barriers to going green. Of course, high costs are among the identified barriers. Thus, it is critical to present to contractors the increasing revenues associated with going green, which would ease the way for them to overcome the barriers. This identified the need to analyze green contractors’ revenue performance. This also highlights the second gap which is the lack of quantitative studies analyzing green building market trends to highlight the financial benefits to contractors to promote their involvement in green buildings. Moreover, the reviewed efforts on the business aspect of green buildings cover regions in Asia, Africa, and Europe with no focus on North America, where green buildings are currently booming [26]. All of these motivate the need for additional research to help contractors overcome the financial challenges by showing them, with numbers collected from practice, the advantages of engaging in sustainable and green building construction (e.g., improvements in reputations and increases in revenues).

Contractors are in the business of construction which is, in large part, profit-driven. Thus, if we show that there are considerable revenues to be had in green building construction, and these revenues are increasing, this could motivate some contractors to join this growing market. This is part of the motivation and need for the work documented in this paper. The gap here is that there are no research studies presenting revenue data and covering the trends to help contractors make an informed decision on the topic. Thus, we have consolidated and analyzed revenue data as well as conducted statistical forecasting to see if these questions can be answered. The more specific questions are: have green building revenues increased in the past decade? If so, how are they distributed across the various green building sectors? Will the green building construction market continue to grow?

3.2. Objectives

This paper presents a unique market analysis study of the top 100 green building contractors’ (GBCs) revenues in the United States based on the green building revenue (GBR) data available and collected from Engineering News-Record (ENR) during the years 2008 through 2020. Statistical analysis methods, including data-mining techniques and time-series analysis, are applied to: (1) analyze the trends in the GBC revenue performance and growth, (2) benchmark against the overall construction industry performance, (3) identify and compare among different revenue-based clusters of the top 100 firms to determine similar market trend behaviors, (4) highlight focus areas by building sectors, and (5) attempt to forecast future revenues and market shares of the total GBC market and its different subsets.

Research-wise, this paper builds on the analysis and findings of an earlier paper by the authors that presents a preliminary analysis of the market trends of GBR [27]. Industry-wise, on the one hand, this paper presents to contractors, based on data collected from practice, the accumulated revenues associated with constructing green buildings and gives them a detailed overview of what to expect based on their firm’s size. On the other hand, it highlights the building sectors with the highest revenues based on the firm size. Nevertheless, it promotes going green by forecasting the GBR for future years, which shows a continuous increase, especially across top-ranked firms. In the long-term, this study aims to contribute to the sustainable development plan by encouraging the construction of green buildings which brings the world one step closer to reducing the depletion of resources in the present and preserving life in the future.

The paper starts by describing the methods used for acquiring the data and analyzing it. Then, the results are presented and analyzed. This is followed by discussing the results in light of the literature and available reports on the matter while presenting future research ideas and the limitations of the study. Finally, the paper concludes by summarizing the key takeaways and highlighting the contributions of this paper.

4. Methodology

To accomplish the paper’s objectives, the methodology adopted includes data collection, cleaning, and analysis using several techniques, as shown in Figure 1 and described in the following sub-sections.

4.1. Data Collection and Cleaning

The authors collected lists of the top 100 GBCs in the US published on a yearly basis by ENR [21,28,29,30,31,32,33,34,35,36,37,38,39]. ENR publishes these reports every year, and each report shows the previous year’s data and rank, and right next to it, it shows the same companies’ rank for the year before that, just as a reference point for comparison to see how each firm has improved (or not) in the ranking (year to year). The collected data covers the contractor’s rank, GBR, percentage of contractor’s revenue generated from green contracting, number of accredited staff, and the percentage distribution of GBR across the different building sectors as shown in the examples in

Table 1. Sample collected data for firm features from ENR for year 2020.

Firm Name	Firm a	Firm b	……	……	Firm z
Rank	1	2	……	……	100
Accredited staff	756	436	……	……	NA
Green revenue (USD, in millions)	6797.1	4568.78	……	……	5.09
Percentage of total revenue	47	79	……	……	1

and

Table 2. Sample collected data for green contracting by sector.

Green Contracting by Sector (Percentage)	2008	2009	……	……	2020
Airports	-	-	……	……	7.9
Educational facilities	15.4	18.8	……	……	12.1
Government offices	12.1	13.6	……	……	8.0
Healthcare	9.6	14.8	……	……	7.8
Hotels	8.4	3.5	……	……	3.3
Manufacturing and industrial	3.3	3.0	……	……	3.2
Multi-unit residential	10.3	7.0	……	……	11.4
Retail/office	28.2	21.4	……	……	25.9
Sports, entertainment, and civic	4.2	6.5	……	……	5.0
Telecommunication	2.3	3.0	……	……	6.0
Non-building miscellaneous	0.3	0.7	……	……	6.0
Other buildings	6.0	7.7	……	……	4.0

. ENR compiles these lists through a survey data collection technique involving contracting firms. The rank is for the revenues of projects that have been certified by a third-party organization that sets standards for measuring a building’s sustainability performance of environmental impact, energy efficiency, or carbon footprint. These revenues are referred to as GBR. A total of 13 reports were collected, and the GBR performance of 209 contractors was assessed for the years 2008 through 2020. The projects taken by these contractors are dispersed across the US and cover the various building sectors, including commercial offices, educational facilities, and hotels, among others. In addition, data were collected about the construction industry spending from the US Census Bureau for each month and aggregated for each year as shown in the examples in

Table 3. Sample collected data of construction industry spending.

Spending (US$, in Billions)	January	February	……	……	December	Total Construction Spending
Year 2008 spending	1121.5	1121.6	……	……	1053.7	13,075.9
……	……	……	……	……	……	……
Year 2020 spending	1369.2	1366.8	……	……	1490.4	16,733.9

. The collected data were cleaned using Microsoft Excel, and data analysis was performed in Excel and R studio statistical computing software as described in the following sub-sections.

4.2. Descriptive Statistics and Trend Analysis

Using the total GBR values for each year, different graphs were plotted to understand the performance of GBCs across the years. The analyzed trends include frequency of contractors with more than 50% of total revenue as GBR, the association of GBR with accredited staff, GBR distribution by building sector, and benchmarking of GBR market growth against construction market growth and inflation. The analyzed trends were done by counting and summing the data. The benchmarking relied on Equation (1) to calculate the green building market percentage growth. The monthly reports collected from the US Census Bureau are considered representative of the construction industry market. Using the data from Table 3 as well as Equation (1) but replacing the GBR with total construction spend, the construction market percentage growth was also calculated. As for inflation, it was calculated using the inflation calculator [40]. This trend analysis, coupled with the analysis done by Sanboskani et al. [27], presents the current status and performance of the GBC firms as a whole.

$$\mathrm{Green} \mathrm{building} \mathrm{market} \mathrm{percentage} \mathrm{growth} \mathrm{from} \mathrm{year}\left(\mathrm{n}-1\right) \mathrm{to} \mathrm{year}\left(\mathrm{n}\right)=\frac{{\mathrm{Total} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}\right)}-{\mathrm{Total} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}-1\right)}}{{\mathrm{Total} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}-1\right)}}$$

(1)

4.3. Segmentation/Cluster Analysis of the Top 100 GBCs

To understand the performance of firms depicting similar behavior during the 13-year study period, segmentation was performed to identify the groups of ranks of similar growth rates.

The objective of segmentation is to partition the data into subsets with similar market trends using a data mining technique called “k-means clustering” on the 100 top GBC revenues. K-means is the most popular and simplest partitional algorithm [41]. Although there are many other clustering algorithms to choose from depending on the choice of the objective function, probabilistic generative models, and heuristics, k-means remains easy to implement, simple, and has a record of empirical success [41]. Moreover, other clustering algorithms such as DBSCAN and OPTICS do not perform well on small datasets whereas k-means works fine and takes less time to execute versus other methods [42]. Among the different clustering techniques, the “partitioning” k-means clustering method is the one usually used for market analysis applications [43,44]. It is a data science algorithm to identify groups of ranks with similar growth rates during the 13-year study period. K-means method minimizes the distance between the center and the points within a cluster making it a centroid-based algorithm [45]. To achieve the purpose of k-means, two input parameters are required: the standardized data matrix and the number of clusters to be analyzed. The first step in this segmentation approach is to calculate the yearly growth rate for all the firms in each year using Equation (2).

$$\mathrm{Firm} \mathrm{yearly} \mathrm{growth} \mathrm{rate} \mathrm{from} \mathrm{year}\left(\mathrm{n}-1\right) \mathrm{to} \mathrm{year}\left(\mathrm{n}\right)=\frac{{\mathrm{Firm} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}\right)}-{\mathrm{Firm} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}-1\right)}}{{\mathrm{Firm} \mathrm{GBR}}_{\mathrm{year}\left(\mathrm{n}-1\right)}}$$

(2)

Then, these growth rates for each rank, shown in

Table 4. Sample of the growth rate data matrix.

Rank	2008–2009	2009–2010	……	……	2019–2020
1	0.14	0.18	……	……	0.04
2	−0.04	0.03	……	……	−0.06
……	……	……	……	……	……
100	0.13	−0.01	……	……	−0.91

, are used as the input matrix in R studio. The data in the matrix undergo standardization using the “scale” function in R, and the standardized matrix is analyzed by the “elbow method” to determine the needed number of clusters. The “elbow method” suggests that the point at which the change in sum of squares becomes minimal is eligible to be chosen as the number of clusters, or as the method’s name suggests where an elbow is seen [46]. Essentially, the sum of squares is a measure of the Euclidean distance between points and the center within each cluster where a smaller sum of squares is recommended [47]. A relatively high “between cluster sum of squares/total sum of squares” represents the reduction in the sum of squares needed to determine the k [48]. After determining the right k, the clusters are fit using that k and the standardized data matrix as input for the “k-means” function in R. The results of k-means clustering are presented in the “Results” section.

To illustrate the revenue and percent share changes, as well as growth in subsets, different graphical representations were plotted and discussed in the “Results” section. These include the percent share and the revenue share of the top 100 GBRs per subset. The growth in terms of market share and revenue for each subset is plotted to observe the general performance of each subset between the years 2008 and 2020 noting which have positive growth and which have negative growth. Using 2008 as the base year, the revenue growth is also calculated for each year for the 10 subsets. Moreover, a comparison between green and non-green revenues for each subset is plotted. The distribution of the revenue by sector is plotted for each subset to attribute the growth of each subset’s GBR to a certain building sector by plotting the average across the years for each. Finally, the number of accredited staff per a billion dollar of GBR is plotted for the top 100 GBCs, the top 9, and the bottom 6. The equations used and/or the process implemented to develop the graphical representations and comparisons are described in Figure 2.

4.4. Time Series Analysis

Considering that the yearly GBR data are correlated to previous data points as well as time, time-series analysis would be useful to analyze it and predict future GBR. Time series data are a chronological sequence of observations on a variable of interest exhibiting dependence and temporal ordering [49,50].

To reduce the noise in the data and uncover patterns, a recommended first step is to overlay a smoothed version of the data on the original time series plot [50,51]. The simple moving average is one of the most straightforward and widely used approaches to smooth the data. Different spans for the simple moving average are used to determine which smooths the data better. This is done in R using the “rollmean” function and moving average spans of 2, 3, and 4. The results of this are presented in the “Results” section.

Before moving to the prediction step, the data should be stationary [51]. Stationary means that the time series exhibits similar statistical behavior in time [51]. It is tested by plotting the autocorrelation function (ACF) and partial autocorrelation function (PACF) of the smoothed data [51]. If the plots show that the data exhibit the “not stationary” property with significant values for ACF and PACF, differencing should be applied. To determine which differencing order suits the data, the function “auto.arima” is used in R since it generates the optimal parameters after testing all possible combinations and outputs the model with the lowest AIC and BIC [52]. After identifying the right Arima model, the model is fitted on the available data and is used to predict the revenues for the upcoming five years using the “fitted” and “forecast” functions in R, respectively. This analysis is also done for the clusters and is presented in the “Results” section.

5. Results

This section shows the results of the data analysis methods mentioned earlier presenting a recent market analysis of the top 100 GBCs. First, trend analysis for the entire dataset is conducted over the past 13 years. Then, using the clustering results, other trends are analyzed. Finally, GBR forecasts for 2021 through 2025 are estimated.

5.1. Trends for the Top 100 GBCs

Figure 3 shows the total revenue for the top 100 GBCs from 2008 to 2020, as well as the number of accredited staff. In general, there is a continuous increase in the GBR except for the three years 2012, 2014, and 2020 for different reasons discussed by Sanboskani et al. [27]. These include lack of survey participation from big firms and the effect of COVID-19 constraints. Moreover, for the first couple of years, the results show that as the number of accredited staff increases, the revenue increases, leading to the assumption that the larger the number of green construction experts in the contractor’s team, the better the contractor’s performance in green buildings, measured by an increase in the GBR. However, from year 2012 onwards, this assumption is no longer supported as an inverse relationship is shown between these parameters. Hence, beyond a certain threshold, the number of accredited staff is no longer expected to influence the GBR. Another metric was calculated to assess the number of accredited staff per 1 billion USD of GBR for the top 100 GBCs and for other subsets as discussed in Section 3.2.

Figure 4 shows the frequency of contractors (out of the 100) having more than 50% of their total revenue as GBR. Although a significant decrease is shown for the years 2012, 2014, and 2020, green buildings construction is gaining more popularity where on average, almost one-third of the contracting firms are making more than 50% of their revenues from green building projects.

As shown in Figure 3 and regardless of the years where the GBR decreased, the total revenues of the top 100 GBCs almost doubled in the past 13 years. Figure 5 benchmarks such remarkable performance against the construction market performance and US economy inflation by comparing the percentage growth from year to year [40,53]. The results show that the green building market provided some buffer in the recession period. According to the ENR report published in 2010, the green building market continued to thrive despite the recession [29]. However, right after that, the construction market started growing back as a whole while the green building market faced a downfall. This might be due to following the recession period; investors were in a haste to benefit economically from going green and did not care a lot about applying for certifications [29]. Contractors were facing uncertainty when clients were going after the economic and operational benefits of sustainable construction and did not seek the certifications. Hence, even though contractors and investors might have abided by green building practices, their efforts were not certified by the right parties to be considered as part of the GBR. In general, except for the three years described earlier, the green building market has been outperforming the construction market. This shows that the green building market’s contribution to the construction market is increasing as a whole with a growth rate of more than 5% on a yearly basis. This is another reason to encourage green building construction. In the years under study, the inflation rate was between 0 and 4%, which was always less than the GBR growth except for the years with negative growth. This is an indication that the growth in GBR is critical.

The GBR distribution for the top 100 GBCs was also plotted across the building sectors in Figure 6 to help contractors specialized in specific sectors know how much these sectors account for from the total GBR. The results show that the retail/commercial offices sector maintained a relatively significant contribution of about 25% throughout the years, except for 2010 and 2011, whereas manufacturing and industrial buildings had the smallest average contribution throughout the years, except for the years 2010 through 2014 where hotels had the smallest contribution. Airports projects were not part of the business early on but started in 2010 and have been increasing slightly since then. Multi-unit residential also encountered an increase in GBR over the years associated with the increase in green design revenues for the years prior to the noted increases. On the other hand, the contribution from healthcare buildings decreased with time. This is also the case for government offices; however, they regained some contribution in 2020. In general, the other sectors maintained relatively the same contribution across the years. To better understand which contracting firm sizes execute more in which building sectors, the distribution by sector is also assessed for the subsets in Section 3.2.

Figure 7 shows that except for the first year, the median for the GBR is relatively constant; yet the dispersion between the GBR values and the mean values are increasing with years reaching higher values. This supports the need to study the firms in subsets where the increase in dispersion is expected to be from larger firms with larger recorded GBR.

5.2. Trends for Segmentation

Figure 8 shows the within clusters sum of squares for different values of the number of clusters (k) ranging between 2 and 30. K= 10 is the number of clusters where the reduction in the sum of squares becomes minimal. Another evidence for the choice of k is by comparing it to k = 7 and k = 13. The results show that it has a relatively high “between cluster sum of squares/total sum of squares”, which represents the reduction in the sum of squares that this number of clusters achieves. For k = 7 it is 64.95%, for k = 10 it is 75.25%, and for k = 13 it is 77.3%; hence, there is no more significant reduction from k = 10 to k = 13 as there is from k = 7 to k = 10 without the risk of overfitting the data. Thus, the inputs used for the k-means function in R are the 10 clusters and the standardized matrix. The subsets are determined to be of the ranks 1–9, 10–20, 21–37, 38–45, 46–64, 65–75, 76–81, 82–85, 86–93, and 94–100. Figure 9 shows the average annual growth per rank divided into the 10 subsets.

Figure 10a,b show the percent share and the nominal revenues of the top 100 GBRs per subset, respectively. Results show that in terms of percent share, the subsets seem to be stagnant at about the same percentage meaning that the top 9 firms are always responsible for about 42% of the GBR for the top 100 GBCs. However, in terms of the dollar value, all subsets have encountered an increase in revenues, where the first five subsets (i.e., the top 64 ranks) have almost doubled their revenues between 2008 and 2020. These represent the top two-thirds discussed by Sanboskani et al. who have an average growth rate of 5.7% [27].

Following up on Figure 10, Figure 11 shows the growth rate for revenue and market share for year 2008 versus 2020 for each subset. Except for firms in the first two subsets, which are responsible for about 63% of the revenues, and the last one, which is responsible for less than 1%, all the firms seem to be losing their relative revenue shares. As the rank increases or the firm gets smaller in size, the market share loss increases. Nevertheless, the graph confirms that contractors in all ranks are encountering an increase in revenue value since the initiation of the green building survey except for the subset 82–85 and 86–93, which seem to be facing the most turbulence. It is expected that the last 15 ranks to be losing in terms of their revenues considering that firms occupying these ranks are not constant and there are new small-sized firms trying to join the green building industry but failing. Yet, the last 6 firms show an increase of 147% which can be explained by this subset having its lowest revenue in 2008 which increased by far in all the other years although still faced turbulence from year to year. These results are also confirmed by Figure 12 that shows the percent growth in revenues for each of the subsets using 2008 as the base year. As discussed, unlike the other subsets, subsets 82–85 and 86–93 seem to have a sharp decreasing trend going below zero. It also shows that the top 64 firms grow at a faster rate than the others. Another interesting observation is that the bottom 6 firms had very fast growth rates, although they represent the smallest portion of the revenues. As a whole, the top 100 GBCs have an increasing percent growth in revenues for each year compared to 2008.

To assess the reasons behind these growth rates, Figure 13a shows the distribution of revenues in percentage between the different building sectors for each market subset in 2020. It seems that the fastest growth rates for the top 64 firms have to do with the building industry they are involved in the most, which is retail including commercial offices and retail facilities. The focus shifts at the 65th firm and beyond to educational facilities. In addition, Figure 13b shows the difference in revenue values across the building sectors for years 2008 versus 2020 for subset 10–20 to highlight the building sector that led to the best increasing growth rate. The results show that the increase is in retail and multi-unit residential between 2008 and 2020. Hence, shifting focus to these building sectors is expected to improve green building revenue.

Figure 14a,b show the green and non-green revenues for the subsets, respectively. Although the non-green building revenue for the top 100 GBCs is always higher than the green revenue across the 13-year period, the GBR is growing at a faster rate. The green revenue for the top 100 GBCs grew by 81% whereas the non-green building revenue increased by 6% from 2008 to 2020. The figures also show that in years 2010, 2017, 2018, and 2020, the green revenue for the Top 9 firms exceeds their non-green revenue.

Figure 15 shows the number of accredited staff for every 1 billion USD for the top 100 GBCs, which has the same trend as the number of accredited staff in general, as shown in Figure 3. Moreover, the top 9 firms seem to have the same trend; however, the bottom 6 firms do not exhibit a meaningful trend across the years. The results show that there is a higher number of accredited staff per 1 billion USD where these firms make nearly negligible revenues compared to the top ones. By plotting this metric for all the subsets, the results show that the top 37 firms exhibit a similar trend to the total, unlike the other firms. Furthermore, summing up the number of accredited staff for each subset shows that the top 37 firms have staff in the order of four digits while those of the others are in the order of three digits where the top 37 firms are responsible for 80% of the GBR across the years (Figure 10a). Hence, this might indicate lower-ranked firms cutting their resources in terms of accredited staff by probably hiring more experienced ones that would still provide the needed expertise but are more efficient than 10 junior staff. This would reduce the contractor’s costs for going green which was identified as a barrier by the literature.

5.3. Time-Series Analysis Results

Figure 16 shows moving averages of spans 1, 2, 3, and 4 for total green building market revenues from 2008 to 2020. Span 4 seems to be the best smoothing option as the data reveal a steadily increasing pattern. Hence, a moving average of span 4 is used to smooth the data.

The plots of ACF and PACF show that the data exhibit the “not stationary” property with significant values for ACF and PACF as well as decreasing ACF and first PACF lag close to 1. Hence, differencing should be applied. As discussed in the “Materials and Methods” section, “auto.arima” is used in R to determine which differencing order is needed. The output points to ARIMA(0,2,0); hence, a differencing of order 2 is needed and no further moving average and autoregressive processes are needed. To verify that the stationary and autocorrelation problems are solved, the ACF and PACF of the ARIMA(0,2,0) are plotted. Figure 17 shows that both ACF and PACF satisfy that the residuals are independent now since there are no more significant correlations (blue lines not exceeded) except at lag 1 which is normal due to the random error [54]. Thus, an ARIMA(0,2,0) model fits the data and will be used for forecasting.

The ARIMA (0,2,0) model is plotted in Figure 18 along with the forecasted revenues for the years 2021 through 2025 with the upper and lower prediction intervals. Similarly, Figure 19a,b show the ARIMA model for each subset. The results indicate an increase anticipated to reach 83.325 billion USD in 2025 for the top 100 GBCs. Half of it is by the top 9 firms only confirming the analysis by Sanboskani et al. [27]. In addition, the firms ranking 10–37 are expected to contribute by 40% from the total, leaving about 10% for all other ranks.

Table 5. Forecasted 2025 GBR (USD, billions) for the GBC market subsets.

Subset	2020 Revenue	2025 Predicted Revenues	95% Lower Limit	95% Upper Limit
Top 9	31.92	40.25	31.91	48.59
10–20	15.70	19.98	18.83	21.12
21–37	11.12	12.93	12.11	13.75
38–45	3.26	3.86	1.87	5.84
46–64	4.71	5.27	4.55	6
65–75	1.68	1.64	1.46	1.82
76–81	0.66	0.68	0.66	0.71
82–85	0.32	0.4	0.37	0.42
86–93	0.37	0.58	0.42	0.73
94–100	0.42	0.4	0.25	0.55
Top 100 cumulative	70.16	85.99	72.43	99.53
	Top 100 model	83.33	66.17	100.48

shows the observed revenues for the top 100 GBCs and each subset in 2020, as well as the predicted revenues in 2025. The predicted market revenues for the subsets were summed up to compare against that resulting from the top 100 model. The results are almost the same differing by about 3% due to rounding errors. Hence, this is a confirmation of the results from the models.

6. Discussion and Limitations

A report about the 2018 green building trends showed that almost one-third of the firms perceive green buildings as not being affordable and only meant for high-end projects [55]. This paper contributes to altering this concept and encouraging green buildings by providing a systematic analysis of market trends for contracting firms to make more informed decisions when going green. A study by Tan et al. concluded that there was no unique relationship between sustainable construction practices and contractors’ competitiveness at that time, but they anticipated that this would change in the future [56]. Ten years later, the current paper highlights the increase in revenues associated with constructing green buildings (Figure 3) confirming the expectations of Yan et al. [8]. This discussion ties in with focusing on one of the dimensions of the triple bottom line since the sustainability concept is often considered a triple bottom line framework which incorporates the three dimensions of performance as environmental, social, and financial [57]. There has been a lot of work published on the social and environmental dimensions of sustainable construction, but considerably less work on the financial dimension, especially when considering the market performance of GBC [7,8,20,58,59,60]. Thus, this paper’s novel contribution is that it started the critical discussion of the financial aspects of sustainable construction, particularly focusing on and identifying the increasing revenues generated from sustainable construction and making this new information available to construction firms. This paper shows them there are considerable and increasing revenues in this industry sector to encourage them to engage in it; hence filling an important gap in the body of knowledge around the financial dimension of sustainability.

A study in 2018 compared the cost performance of green and conventional construction projects to deduce that most green building construction projects have a cost premium of 5–10% [61,62]. The results indicate that green residential buildings have the highest cost premiums compared to their non-green counterparts, followed by commercial offices [61,62]. The stated cost premium is a main reason why residential buildings are not so popular among GBCs (Figure 6). The results of Bon-Gang also show that project size and project type are different variables with statistical significance that impact cost premiums [61]. This supports the analysis performed in this paper where segmentation of the firms to those exhibiting similar behavior and assessments across the building sectors give the contractors better guidance to make more informed decisions relative to their firm size and types of projects to work on.

Nevertheless, a study in Nigeria showed that sustainable construction of educational buildings creates more fear than other buildings since most are funded by the government, which makes exceeding their budgets an issue for those responsible for delivering the project [63]. The results identify similar behavior in the US in some focused sectors, where the largest firms (ranking 1–64) refrain from committing most of their resources to educational buildings while lower-ranked firms end up constructing more of those (Figure 13a) and these were identified to be losing their GBR the fastest (Figure 11 and Figure 12).

In opposition to earlier studies, a study by Emergen Research in 2020 shows that green residential buildings will be experiencing a substantial growth rate, by 2027, due to the increasing demand for residential buildings, which will dominate the green building construction market [64]. This supports the results presented in Figure 13b that show that multi-unit residential buildings experienced the highest increase between years 2008 and 2020 for the subset of firms that have experienced the fastest GBR growth rates so far. The report also shows that the forecasted increase in the green construction market will be driven by the growth in North America (38.6%). This is another indicator of why it is critical to understand the market of GBC in the US, since it is responsible for a substantial portion of the developments in the green construction market.

Moving to practice, many experts in the field of sustainable design and construction support that the pandemic and government shutdowns slowed down the development of green buildings in 2020, on one hand, but reshaped the whole mentality of going green on the other hand to improve the approach of the built environment to support the health and well-being of occupants [16,65,66,67]. This explains the decline in GBR in 2020 (Figure 3, Figure 4 and Figure 5). The most recent report by ENR discusses that “green design firms and contractors report that building performance standards are being driven less by new technologies and more by market pressure as public awareness grows of the magnitude and associated risk of the climate crisis” [16]. This supports the predicted continuous increase in GBR (Figure 18) since the public mentality now shifted focus to maintaining their environment, especially after the COVID-19 pandemic. Papiez, the director of sustainable design at Ewig Cole, explains how reducing embodied carbon can be achieved through leaner design by limiting the quantity of material used in construction and eliminating unnecessary products [16]. A sustainability director at one of the top 100 green design firms emphasizes that the pandemic increased clients’ willingness and interest in sustainable structures which means that more sustainable design and construction are expected in the upcoming years [16], hence increasing the GBR even further. Thus, to complement all of these plans and to inform decision-making, this paper explores the future of GBR for contractors interested in pursuing this market. It also shows them the revenues of the various sectors. Hence, if a firm is specialized in a certain sector (e.g., airports), they will know how it is doing in terms of revenue and whether it is an attractive opportunity for them to widen their spectrum and diversify their financial opportunities while fulfilling sustainability goals at the same time. It gives them a glimpse of what to expect with time as achieving sustainability goals becomes more of a requirement than a luxury (e.g., already required for US federal governments, for instance).

This paper addressed one dimension that plays a role in informing contractors’ decisions when constructing green buildings. However, more thorough studies of how to overcome other challenges for contractors must be undertaken in future research endeavors. One such approach is understanding how revenues from green buildings can be associated or used for green construction materials costs, which is one of the biggest challenges for contractors. As a limitation, and due to the lack of data availability, this study relied mostly on the financial metric of revenues, and somewhat on the number of accredited staff. Future studies can investigate the influence of the number and years of experience of accredited staff and the performance of GBCs. Other potential metrics to include in the analysis include the number of projects completed and the number of projects successfully completed within budget and on time, among others. Nevertheless, if the profit and net rate of return on the different types of green buildings are accessible, more thorough analysis can be done on those to show which sectors seem to be more profitable to which contractors. Probably, revenues can be studied from another perspective of how they are utilized in other green building projects and how they could influence the popularity of constructing green buildings. On the other hand, analyses around the best project delivery methods, procurement methods, and selection approaches, as well as contract types, can be conducted to give more guidance for investors and contractors on which combinations of the available options across each of the processes lead to more successful experiences with “going green”. Another limitation is that the analyzed data are for the top 100 GBC firms which do not necessarily represent the whole industry but are generally responsible for a large portion of the revenues. Furthermore, the data collected through the surveys do not always represent the same firms since some firms might not participate in the survey in a given year. Moreover, the ranks of the participating firms change across the years and no one firm is expected to hold the same rank throughout the study period, especially since there is a large failure rate in the construction industry and many companies can be just starting with their green building experiences and trying to build themselves up.

7. Conclusions

This paper presented a unique analysis of the market status of GBCs in the US using yearly collected revenue data of the top 100 GBCs from ENR. Market trends were analyzed for the top 100 GBCs as a whole and for subsets of those that exhibit similar GBR growth behavior. The main results from our analyses show that there has been a consistent increase in GBR since 2008 except for three notable years due to identified reasons. Benchmarking against the construction market and US economy inflation shows that green buildings are positively contributing to the construction market. Analyses associating the number of accredited staff to GBR provides additional insight to contracting firms on how to handle their resources better while not compromising the needed expertise and still increasing their GBR. One critical takeaway is the results about the building sectors, revealing the popularity of retail and commercial offices at all times covered by the analysis, and a continued increase for sustainable residential buildings.

Studying the top 100 contracting firms in clusters/subsets revealed that the top 20 firms are responsible for about 63% of the revenues and have constantly been increasing their revenues and market share. Studying the subset that demonstrated the fastest and most revenue growth revealed the shift in focus on more residential buildings. Furthermore, the paper provided a forecast of future GBR that continues to increase for the top 100 firms and is expected to reach about 83 billion USD in 2025. The top two-thirds of the firms are also expected to increase in revenues while the rest show relatively constant revenues. Accordingly, the analysis presented would be the first step to help contractors interested in constructing green buildings know which types of projects to go for considering their size, resources, and expertise. Moreover, it provides insight for the contractors already in this field to better manage their resources and strategically plan to grow. As governmental policies and other reports have mentioned, the need for sustainable buildings will eventually reach a point where it is a necessity in order to meet policies aiming to sustain the built environment and human health. Hence, it is critical for contractors who are not there yet to start preparing themselves, and at least explore the opportunity to enter this market sector if it is the fit for them. Owners and investors also benefit from this study by learning which sectors are growing and which sizes of contractors are involved in them. The presented analyses can also help owners, as well as accreditation organizations, note the sectors that are least invested in or that may be causing declines in revenues for smaller firms. This way they can check the reasons for such performance and maybe develop new policies or incentives to resolve the issues.

Other than providing market analyses for contractors and other stakeholders to make more informed decisions, this paper contributes to the sustainability and construction management body of knowledge by (1) conducting statistical clustering and trend analysis to analyze the GBC market data and uncover trends for different firm sizes and sectors, and (2) forecasting GBR trends into the near future. The paper updates the state of the art on studies of sustainable development, focusing on sustainable. Furthermore, the methods presented in this paper can be replicated in another country and into the future, as long as the needed data are available.