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News - May 2018
Construction market provides hope for the future
Despite a slowing of the market in recent months, experts predict billions will be spent on healthcare construction over the next five years, providing a wealth of opportunities for designers, builders and product developers.
The Government’s National Infrastructure and Construction Pipeline, published in December, details more than £460bn of planned public and private infrastructure investment, with a total projection of around £600bn over the next 10 years.
Investment in ‘social infrastructure’, which includes hospitals and other health and care facilities, lists 184 separate projects with a total value of £43bn.
Of those projects, five are healthcare related and worth £8.5bn to 2020/2021. Another £3bn worth of projects are expected beyond 2021, making a total pipeline worth in the region of £11.5bn.
It states: “The NHS estate needs to be fit for the future and suitable for modern methods of care.
“This means making best use of the existing estate, as many small-scale projects up and down the country have been doing.
“However, where needed, or where it represents better value for money, there will also be wholly-new facilities.”
In the pipeline
And, in his autumn budget, the Chancellor announced a £10bn investment in existing NHS buildings, new facilities and the modernisation of patient care.
A total of £3.5bn will be made available for the estate between now and 2020, with the extra £6.5bn coming from sale of surplus assets to developers for much-needed housing.
There is also a lot of interest in the new ProCure22 framework, which will see a £4bn investment in the NHS estate between now and 2020.
Already £202m worth of projects have been registered under the framework, including new mental health and eating disorder facilities at Barnet Enfield & Haringey Mental Health NHS Trust; the first phase of the Evelina redevelopment by Guy’s and St Thomas’ NHS Foundation Trust; and a new cardiac intensive care unit, cath lab and CT scanning department at Great Ormond Street Hospital.
Research from construction industry analyst, Barbour ABI, shows opportunities particularly in the South East of England and Wales, with primary and social care expected to be key markets moving forwards.
And, despite ongoing concern over the impact of Brexit on the construction industry as a whole, and an overall reduction in capital schemes starting on site; the long-term opportunities within the healthcare sector are expected to improve.
According to Barbour ABI’s most-recent Economic & Construction Market Review, across the construction industry as a whole, the value of building contracts awarded in February 2018 was £4.9bn, with London topping the regions with 24.8% of activity.
And, while the overall value of contract awards was down by 9.1%, following an unturn in January; the actual number of projects increased by 3.1% and was 3.4% ahead of February 2017.
While medical and health projects made up only 3% of overall activity; the number of contract awards increased by 17.3% in February compared to January - standing at £148m - up by 15.7% on February 2017.
But, while overall figures have been on upward trend since December 2017; values for February 2018 remain around 38% lower than in 2016.
AMA Research records around 10 large NHS-led programmes currently underway.
A spokesman said: “Going forward the key construction opportunities in the healthcare sector are likely to be in the primary care sector - including GP surgeries and community health centres - and this may entail further opportunities for the development of hub facilities and integrated GP premises.
“In the acute and secondary sector, much of the medium-term is expected to lie in refurbishment and extensions, with very few big new hospitals planned for development.”
But it’s not just the UK where there are opportunities to be had.
Coming to the end of two decades of significant investment in healthcare infrastructure; the UK has much expertise to offer overseas.
Key markets are opening up in India, China and the United Arab Emirates, while Denmark is currently undergoing the biggest building project since its 14th-century church-building scheme within the healthcare market.