A Glenigan report reveals that, after a tough year for healthcare construction, fortunes are changing.

A rich pipeline of projects is expected to help boost the healthcare construction market following a challenging 12 months. According to the Glenigan Construction Review, published at the end of last year, in the three months to the end of November 2022, detailed planning approvals, totalling £1,844m, increased 64% against the preceding three months to stand 85% up on the previous year. Major project approvals, totalling £978m, also experienced a very-strong period, with the value increasing 146% compared with the preceding three months and up on a year ago when no major projects were granted detailed planning approval. However, underlying approvals, at £866m, did not fare so well, experiencing a 16% decline compared with the preceding three months to stand 13% lower than the previous year. The figures are seen as evidence of a revival of fortunes after the report showed that underlying health work starting on site – worth less than £100m in value – during the three months to November, fell 37% against the preceding three months on a seasonally-adjusted (SA) basis – totalling £539m.

A revival of fortunes

 In fact, no major projects worth £100m or more started on site during the period, remaining unchanged on the preceding three months, but down on the previous year. Overall, health project starts on site decreased 35% against the previous three-month period and by 44% against 2021 figures. Unsurprisingly, hospitals accounted for the greatest proportion (41%) of health work starting on site during the three months to November, despite the value falling 56% against 2021 levels to total £221m.

Bucking the trend

And, geographically, while most regions experienced declines in work starting on site, the South East bucked the trend, where value increased 7% on the previous year to total £176m, boosted by the £58m development of a new emergency department in Portsmouth. Health starts in Scotland also more than doubled – up 114% compared with 2021 levels to total £32m – a 6% share of the total value. The report states that increases in material prices and heightened economic uncertainty arising from the ‘mini budget’ in September are to blame for impacting confidence and stalling projects moving to site.