Featured Sector: Health

Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).

The level of health building is closely linked to the funding of the NHS. Much has been made of public sector cuts and the impact upon various sections of the economy, especially the construction industry. However, this sector has shown that it does not just rely on government funding to sustain activity.

In 2011 there was an 8% increase in the underlying value of project starts. However, one of the main drivers of growth was private investment in nursing homes – though there was also an increase in larger hospital developments. These larger hospital projects were predominantly publicly funded but the declines in public funds overall weighed on other types projects. As such, the 8% growth rate could not have been achieved without an increase in private sector spending.

The sector has performed unexpectedly well in 2012 as private sector health operators have continued to invest in new construction projects, for the full year we expect starts to be up by 6%.