Activity in the healthcare construction sector stalled in the three months to June, with a 17% decrease in project starts and a 17% drop in detailed planning approvals compared to the previous quarter.

However, Glenigan’s July Construction Review reveals a 40% increase in contract awards in the same period, hinting at a possible revival later in the year.

Compared to last year, detailed planning approvals were down 80%, project starts were down by 16%, but main contract awards were up 21%.

The report states: “The UK healthcare construction sector is undergoing a transformative phase, supported by a record capital investment increase of £2.3bn in real terms as outlined in the 2025 Spending Review.

“This significant boost underscores the Government’s commitments to major hospital schemes, particularly those addressing urgent safety concerns such as RAAC-affected sites.

“Funding continues for the New Hospital Programme, including the rebuilding of seven hospitals affected by RAAC.”

Types of projects

According to the report, nursing homes and hospices accounted for the largest share (41%), having grown 128% year-on-year to total £412m.

Totalling £18m, the value of dental, health and veterinary centres/ surgeries starting on site declined 78% on a year ago.

And hospitals experienced a 63% decline against the previous year to total £239m, a 24% share of the total value.

Regional figures

The South East at £368m was the most-active region for project starts, accounting for 37% of the total, with the region declining 2% against the previous year.

The East of England at £122m experienced sharp growth, more than doubling (+129%) against the previous year to account for 12% of the total value.

The North East, at £13m, also experienced a strong period, more than quadrupling against the previous year (+355%).

In planning approvals, the East of England accounted for the largest share of approvals (52%). However, the region declined 76% against the previous year.

The top three contractors were Laing O’Rourke (three projects worth £1.7bn), Graham Construction (three projects worth £415m), and Mace (three projects worth £309m).

The leading clients were the Department of Health and Social Care (149 projects worth £1.5bn), The Department for Environment, Food and RA (one project worth £920m), and CPD (three projects worth £206m).