Few realize that construction, including new construction and building renovation,
constitutes the nation’s largest manufacturing activity.1 Over 70 percent of this effort is
focused on residential, commercial, industrial, and institutional buildings; the remaining
30 percent on public works. Construction contributes $800 billion to the economy, or 13
percent of the Gross Domestic Product (GDP), and provides nearly 10 million professional
and trade jobs. More than 50 percent of the nation’s reproducible wealth is invested in
constructed facilities.2 Because of the building industry’s significant impact on the
national economy, even modest changes that promote resource efficiency in building
construction and operations can make major contributions to economic prosperity and
environmental improvement.
Several parties—including owners, tenants, and the general public—bear the cost of
building construction. The main direct cost expenditures fall within the categories of
building construction, renovation, operation, and building-related infrastructure.
Indirect cost expenditures stem from building-related occupant health and productivity
problems as well as external costs such as air and water pollution, waste generation, and
habitat destruction.
A building’s “life” spans its planning; its design, construction and operation; and its ultimate
reuse or demolition. Often, the entity responsible for design, construction, and
initial financing of a building is different from those operating the building, meeting its
operational expenses, and paying employees’ salaries and benefits. However, the decisions
made at the first phase of building design and construction can significantly affect
the costs and efficiencies of later phases.
Viewed over a 30-year period, initial building costs account for approximately just
two percent of the total, while operations and maintenance costs equal six percent,
and personnel costs equal 92 percent.3 Recent studies have shown that green building
measures taken during construction or renovation can result in significant building
o p e rational savings, as well as increases in employee productivity. Therefore, building related
costs are best revealed and understood when they are analyzed over the life
span of a building
constitutes the nation’s largest manufacturing activity.1 Over 70 percent of this effort is
focused on residential, commercial, industrial, and institutional buildings; the remaining
30 percent on public works. Construction contributes $800 billion to the economy, or 13
percent of the Gross Domestic Product (GDP), and provides nearly 10 million professional
and trade jobs. More than 50 percent of the nation’s reproducible wealth is invested in
constructed facilities.2 Because of the building industry’s significant impact on the
national economy, even modest changes that promote resource efficiency in building
construction and operations can make major contributions to economic prosperity and
environmental improvement.
Several parties—including owners, tenants, and the general public—bear the cost of
building construction. The main direct cost expenditures fall within the categories of
building construction, renovation, operation, and building-related infrastructure.
Indirect cost expenditures stem from building-related occupant health and productivity
problems as well as external costs such as air and water pollution, waste generation, and
habitat destruction.
A building’s “life” spans its planning; its design, construction and operation; and its ultimate
reuse or demolition. Often, the entity responsible for design, construction, and
initial financing of a building is different from those operating the building, meeting its
operational expenses, and paying employees’ salaries and benefits. However, the decisions
made at the first phase of building design and construction can significantly affect
the costs and efficiencies of later phases.
Viewed over a 30-year period, initial building costs account for approximately just
two percent of the total, while operations and maintenance costs equal six percent,
and personnel costs equal 92 percent.3 Recent studies have shown that green building
measures taken during construction or renovation can result in significant building
o p e rational savings, as well as increases in employee productivity. Therefore, building related
costs are best revealed and understood when they are analyzed over the life
span of a building
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