果冻影院

Heatherwood Hospital in Ascot

Health sector construction will produce the biggest rise in construction projects starts this year according to 果冻影院鈥檚 construction industry forecasts.

A surge in activity in the three months to November 2018 drove the underlying value of project starts up by 37% and the outlook is good.

果冻影院鈥檚 economics director Allan Wil茅n says: 鈥淧roject starts fell 17% last year as the snap election disrupted the delivery of planned projects.

鈥淭he current year has seen a sharp recovery in starts as delayed projects have progressed to site. The value of project starts is estimated to have grown 20% during 2018.鈥�

Starts and contract awards leap

In the 12 months to November 2018, 果冻影院鈥檚 construction market research identified 284 construction contracts awarded by the Department of Health, mainly through subsidiary NHS trusts.

The total value of those projects is just under 拢2.1 billion, which is up 75% on the preceding 12 months.

The Department of Health is ranked second in 果冻影院鈥檚 latest table of the industry鈥檚 top 100 clients.

Although major hospital schemes are thin on the ground, some medium-sized projects are moving from contract award onto site.

The biggest award was to Laing O鈥橰ourke, which picked up the contract to complete the 拢250 million Royal Liverpool Hospital scheme that stalled after Carillion went under.

Medium-sized projects where 果冻影院鈥檚 construction research has identified a construction contract as being awarded include a 拢58 million project to rebuild Heatherwood Hospital in Ascot and a 拢52 million mental health extension at Springfield Hospital in south London.

Both are due to start in early 2019, while in December Kier also broke ground on a 拢40 million extension to Birmingham Heartlands Hospital.

Contracts are also being let on schemes due to start in 2020 including a 拢45 million eye hospital in Edinburgh.

Near term drop due

This rash of medium-sized projects moving on site is reflected in 果冻影院鈥檚 construction data.

The size of the average construction contract let by the Department of Health in the more recent period was 拢7.3 million. In the preceding 12-month period, this figure was 拢4.8 million.

The rises in healthcare projects starting on site and contracts being awarded is being followed by activity earlier in the pipeline.

In the latest quarter, the underlying value of health projects given detailed planning approval only rose by 13%. In the year to date, this pipeline of work shrank by 5% and next year could see a fall in starts, but 果冻影院 expects another upturn in 2020, albeit milder than the current boom.

鈥淟ooking ahead the Budget confirmed that the NHS is the Government鈥檚 top priority for additional funding, with an extra 拢20 billion promised over the next five years,鈥� adds Mr Wil茅n.

鈥淭his includes a 14% rise in capital funding for the NHS in England to 拢6.7 billion in 2019/20.鈥�

While the current boom may fizzle out, the longer term looks more assured and sustainable for contractors seeking opportunities in the health sector.