Healthcare construction projects starting on site increased by 37% in the three months to November, up 7% on the same time last year to total £1.2bn.

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

But the upsurge comes alongside a downturn in both contract awards and detailed planning approvals, key indicators of the future pipeline of projects within the sector.

The report reveals that project starts on site grew on the previous three months and a year ago.

Adding up to £720m, underlying health work starting on site (worth less than £100m in value) during the three months to November fell 10% compared with the preceding three months on a seasonally-adjusted (SA) basis to stand 15% down compared with the previous year.

But, at £500m, major projects (worth £100m or more) starting on site jumped 172% compared with the previous quarter and grew 67% compared with last year.

Overall, health starts grew 37% compared with the previous quarter and increased 7% on a year ago.

Totalling £541m, main contract awards decreased 35% compared with the preceding three months and remained 43% down compared to a year ago.

No major projects were reported, down compared to the preceding three months, but unchanged compared with the previous year.

Underlying contract awards experienced a poor performance, decreasing 2% compared with the preceding three months (SA) and down 43% compared with the previous year.

Detailed planning approvals, totalling £1.3bn, also fell by 24% compared with the preceding quarter to stand 14% down on the previous year.

And major project approvals totalled £589m, a 30% decrease from the previous quarter, but 12% higher than last year, while underlying approvals experienced a 24% decrease (SA) compared with the preceding three months to stand 27% lower than a year ago, totalling £711m.

Types of projects

Accounting for 22% of health projects starting onsite, hospitals decreased 41% on a year ago to total £264m.

Nursing home project starts accounted for 14% of activity, totaling £173m during the period, having decreased 17% on a year ago.

In contrast, dental, health, and veterinary projects jumped 246% compared with the previous year’s levels to total £182m, accounting for a 15% share of health work starting on site.

Like a year ago, no day centre projects started on site.

League tables

The report also provides league tables of contractors and clients, with The Department of Health commissioning the most work – 187 projects worth more than £1.4bn. Smith & Nephew and the Welsh Government came second and third, with one project worth £82m and five projects valued at £68m respectively.

The top contractors were Laing O’Rourke, with one project worth £190m; Integrated Health Projects (IHP), with nine projects worth £187m; and Morgan Sindall, with 14 projects worth £125m.

Regional variation

Totalling £525m, London was the most-active region for health project starts during the three months to November, having grown more than five times compared with the previous year to account for 43% of sector starts.

This growth was boosted by the £500m One North Quay Life Science Building in Canary Wharf.

At £138m, the West Midlands accounted for an 11% share of starts in the region, increasing 118% compared with last year, while the North West also experienced a strong period, having increased 20% compared with the previous year to total £53m.

In contrast, the South East fell 51% on a year ago and the East of England decreased 22% on a year ago.

With a total value of £540m, the East of England was the most active region for detailed planning approvals, having jumped 405% on a year ago to account for 42% of the health sector.

Approvals in the North West climbed 7% compared with the previous year to total £84m, while approvals in the South East decreased 53% in value to total £219m.