Featured Sector : Health

The underlying value of health project starts continued on a long term trend of decline in the three months to February, being 46% lower than a year before.

This followed a 9% fall seen in starts in 2013. Output figures from the Office for National Statistics paint a slightly more positive picture of recent activity, with a 2% year on year rise in output in the third quarter, buoyed by construction work beginning on two major hospital projects during the first three quarters of the year. However workloads in the sector have suffered three years of near continuous decline, and third quarter output was 29% lower than during the third quarter of 2010, and 46% of the peak in the third quarter of 2008. Private sector work on care homes and private medical facilities supported the sector in 2010 and 2011 as NHS work began to decrease, but have been unable to offset further falls in publicly funded work.

Glenigan data on planning approvals is no more positive, with approvals in the three months to January down 46% compared to a year earlier. With the pipeline of future projects becoming increasingly constrained, we anticipate further falls in new project starts during 2014.