Health Sector Construction Contracts Lower

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Health Sector Construction Contracts Lower 15

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The health and medical sector of the construction industry got off to a slow start in 2016. Activity in this vital area decreased by 34.8% when compared with figures from January. Although the value of contracts decreased by 0.2% compared to the previous three months, at £155m, they are up 23% on the same period last year, which indicates that despite the recent fall in activity the long term outlook is positive.

Industry Support

The UK construction and plant hire industry supports the UK government in working on vital infrastructure projects, such as hospitals and other healthcare facilities. The industry supports both the public and private health and medical sectors by providing high quality skills, material and plant in an environmentally friendly way, while also delivering value for money to ensure taxpayers’ money is well spent.

Pipeline Disruption

The health and medical sector of the construction industry took a hit in late 2015 due to a number of projects being shelved because of rising costs and restricted budgets, which impacted the pipeline and led experts to call for the UK Government to do more to support the sector. A more stable pipeline would enable the construction industry to have confidence in the volume of future demand, allowing them to invest in new plant equipment, training and materials. These efficiencies could then be passed on to both the Government and ultimately the taxpayer.

London and the South East

London was the area that saw most activity (33.4%) in March, and experienced an increase of 15.4% from the March 2015 figures. The area was boosted by a £14m new contract to construct a health and social care centre in Highgate. The South East as a whole performed well, with activity up by 19.4% across the region when compared to March 2015.

The North

The North did not fare as well, with the North West and North East seeing falls in activity compared to the same period in 2015, of 34.8% and 11.1% respectively. Activity in Scotland was up slightly by 3.7% in comparison to 2015. It is hoped that increased devolution to regional and city authorities will increase local government spending on Health and Medical construction of new hospitals and clinics, which will help to support the industry in the North of England.

Dominant Sub-Sectors

Health and medical centres and GP surgeries were the dominant sub-sectors for March, accounting for over 40% of the value of contracts awarded. This is a 33% increase when compared to March 2015. The top five architects in the sector were BDP, John Simpson and Partners, Billfinger, Stride Treglown and Steffian Bradley Architects.

Longer Term Outlook Positive

Despite the concerns which still impact the health and medical sector, the longer term outlook is positive, with Head of Infrastructure at KPMG predicting a good 2016 for the UK construction industry as a whole. The medical construction sector should benefit from ring fenced health budgets and the government’s drive to modernise the NHS as a whole.

 

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