The healthcare construction market moving into the second half of 2024 is once again a mixed bag, with contract awards and detailed planning approvals scarce, but projects starting on site up on both the preceding three months and last year.

According to Glenigan’s June Construction Review, underlying health work starting on site (less than £100m in value) during the three months to May 2024 fell 25% against the preceding three months on a seasonally-adjusted (SA) basis to stand 2% down against the previous year – adding up to £740m.

However, at £237m, major projects (£100m or more) starting on site jumped 126% against the previous quarter and grew on last year when no major projects started on site, providing a boost to the development pipeline.

Overall, health starts grew 3% against the previous quarter and increased 29% on a year ago, totalling £977m.

Totalling £729m, health main contract awards were down 39% against the preceding three months and 49% down against a year ago.

Slipping back

And major projects totalled £137m, down 63% against the preceding three months and down 76% against the previous year.

Underlying contract awards also experienced a poor performance, decreasing 32% against the preceding three months (SA) to stand 31% down against the previous year while detailed planning approvals, totalling £1.2bn, slipped back 21% against the preceding quarter and fell 57% on the previous year.

Major project approvals, totalling £347m, decreased 27% against the previous quarter to stand 82% down against last year.

And underlying approvals, at £899m, experienced a 4% decrease (SA) compared with the preceding three months to stand 9% lower than a year ago.

Types of projects

Hospitals accounted for 51% of health work starting on site during the three months to May, with the value having increased 72% against the previous year’s levels to total £500m.

Nursing home project starts, accounting for 16% of the sector, also grew 10% compared with the previous year to total £153m, while day centre project starts totalled £5m during the period, unlike last year when no projects started on site.

In contrast, accounting for 5% of health projects starting on site, dental, health, and veterinary centres slipped back 44% on a year ago to total £47m.

Regional variations

Totalling £274m, the South East was the most-active region for health project starts during the three months to May, having grown 121% against the previous year to account for 28% of sector starts.

At £165m, London accounted for a 17% share with the value of projects starting on site in the capital jumping more than seven times compared with last year’s levels.

Health starts in the South West accounted for 15% and jumped 88% compared with the previous year’s levels, totalling £148m and, accounting for 12%, the North West also experienced a strong period in health starts, having grown 41% on a year ago to total £115m.

Key players

The report also includes league tables of the top 10 health construction clients and contractors, with the Department of Health topping the client table, with £1.26bn worth of work across 213 projects, followed by Ellison Oxford, with one project worth £300m.

On the contractor side, Canary Wharf tops the chart, with one project valued at £500m, with Laing O’Rourke next with one project worth £300m.