Healthcare construction project starts rebounded by 11% in 2024, reversing the 8% decline during 2023, as NHS resources were redirected toward addressing long waiting lists and resolving industrial unrest.

The figures were revealed this week by Glenigan, one of the construction industry’s leading insight and intelligence experts, in its widely-anticipated UK Construction Industry Forecast 2025-2026 report.

The key takeaway from the November Forecast, which focuses on the two years 2025-2026, is construction that project starts will continue to strengthen as the UK economic growth gathers momentum.

Renewed construction growth is forecast for 2025 – up by 8% – and in  2026 – where activity is expected to be up by 10% – as the prospect of a recovering market lifts consumer and business confidence, boosting the industry.

Project starts have stabilised since the General Election, and private-sector work has gradually risen during the second half of this year, reveals the report.

And, although Glenigan predicts only a modest 1% performance dip for 2024 by the year’s end, comparatively it is a massive improvement against the 7% drop in 2023.

Firm development pipelines are also pulling through, with main contract awards standing 7% up on 2023 figures, supporting a renewed rise in industrial and office starts as investor confidence improves.

Yet the path to restoration is not without its challenges.

While the NHS remains a key priority for the Government, a 17% decline in detailed planning approvals during the first nine months of 2024 may limit new projects in the near term.

However, increased funding should boost healthcare projects over the whole forecast period.

The Chancellor has announced a 15% increase in NHS capital funding for 2025/26 to address building maintenance, RAAC repairs, as well as to fund new diagnostic equipment.

As only some of the extra cash will find its way to construction, this increase is expected to support a modest rise in project starts in 2025 (+1%), alongside continued progress on the New Hospital Programme (NHP).

Sector growth is expected to strengthen in 2026 (+10%), with the Government’s long-term spending plans to be outlined in the spring Spending Review.

Commenting on the Forecast, Glenigan’s economic director, Allan Wilen, said: “The construction sector is on track for growth from 2025, and the healthcare sector is already displaying positive signs of recovery.

“It will also benefit from the recent Budget’s adjustments to fiscal rules, allowing for higher levels of capital investment, which will unlock significant public sector and infrastructure projects, including new hospitals and essential facility upgrades.”