Economic assessment of a wood building: Life cycle cost and key stakeholders’ decision-making

The strong trend in urbanization and population growth rises building construction demand following with increased contribution to the global environmental impact. Wood construction is considered to be a key solution to future cities with greater environmental performance and it has the highest potential of meeting all three sustainability criteria, including environmental, social and economic benefits. Therefore, the question of cost-efficiency of wood buildings as the main alternative to traditional construction to combat climate change is at the front of construction development. The aim of this thesis is to assess economic efficiency of a wood building and add to the literature related to the economic optimization strategy of modern wood construction. In order to get deeper knowledge of wood construction development, the thesis eбamines the construction industry key stakeholders’ decision-making aspects. The thesis proposes a research methodology based on the integration of two approaches. First, Life Cycle Cost (LCC) assessment method is performed on the case of a wood building to demonstrate the impact of different cost indicators on building’s economic efficiency. Further, the LCC method involves economic performance assessment to examine the cost competitiveness of a wood building compared to a concrete building. Second, the thesis conducts the online survey and individual interviews with the construction industry key stakeholders to determine what potential benefits and obstacles of wood buildings influence stakeholders’ decisions to implement wood construction. The thesis summarizes three main study results. First, the Life Cycle Costs assessment indicates cost-reducing opportunities for аood building related to material’s lightаeight, prefabrication, and fast installation, which allow decreasing the construction costs. Whereas, recycling and reuse advantage of wood building materials at the end-of-life bring income generation opportunity and impact on the overall cost-efficiency of the wood construction. These results show that wood buildings are able to demonstrate economic efficiency throughout the life cycle. Next, the economic performance assessment reveals the minimal difference in Net present value of costs for the wood building compared to the concrete building. The similarity in economic performances is due to quick wood construction period, adjusting the timing of revenue flow and additional income resulting from wood component reuse, recycling, and energy recovery. These indicate the cost-competitive opportunities for wood buildings in comparison with alternative buildings. Lastly, the results of the online survey and individual interviews confirm that key stakeholders seem to recognize potential benefits of wood buildings and demonstrate growing interest towards the wood construction practice. However, the long-term prevalence of traditional materials in the industry, as well as inconsistency in the academic literature, indicated as obstacles influencing stakeholders’ decision-making to adopt wood in building construction. Based on the thesis results, three suggestions for continuing this study are put forward. First, further research is required to demonstrate the LCC method as involving tool to bring the knowledge about the interdependence of building’s economic aspects. Second, to improve the knowledge on correlating processes contributing to the economic performance of wood buildings, more case studies need to be examined. Third suggestion stresses the need for further research to communicate the knowledge concerning wood buildings technical and economic performance to the construction industry stakeholders.