The healthcare construction sector faced a challenging period in the three months to January, with declines in project starts, main contract awards, and detailed planning approvals compared to both the previous quarter and the previous year.

The concerning figures were revealed this week by Glenigan, one of the construction industry’s leading insight and intelligence experts, in its February Construction Review.

However, it is not all bad news as underlying health work (projects under £100m) saw a 20% increase (seasonally adjusted) quarter on quarter, although remaining down year-on-year.

And the introduction of the new NHS mandate last month aims to address key healthcare priorities, including efforts to reduce waiting times, so, looking ahead, the report predicts the healthcare construction sector is forecast to grow by 1% in 2025.

Sector-specific schemes

While the sector struggled overall, day centres stood out, with a sharp increase from the previous year.

Dental, health, and veterinary facilities accounted for the largest share (36%), growing 7% year on year to £269m.

But hospitals saw a 61% decline in the three months to the end of January, with a total value of £212m, and day centres experienced a four-digit growth compared to the previous year.

Regional activity

The South East was the most-active region for project starts, totalling £166m and accounting for 22% of the sector.

However, this still represented a 20% year-on-year decline.

London, in contrast, had a strong period, more than doubling year-on-year activity (+144%) to £93m, making up 12% of the total value.

Northern Ireland also defied the trend, with project starts surging 312% year on year.

For planning approvals, Yorkshire & the Humber led the sector, holding 27% of approvals after a 170% year-on-year increase. Meanwhile, Scotland saw the sharpest growth, with approvals rising 194% year on year to £33m.

The big players

Laing O’Rourke and John Sisk & Son were the top contractors for the period covered in the report, responsible for two projects and seven projects respectively with a combined value of over £1.2bn.

The top clients were the Department of Health, with 165 projects worth £2.1bn, and Tritax with a single project worth £125m.