NCPA - National Center for Policy Analysis

Health Construction Picked Up in December

February 6, 2017

Health facilities construction turned around in December, growing 0.6 percent versus a decline of 0.3 percent in starts for other construction. Health facilities construction accounted for almost 6 percent of non-residential construction starts. However, the growth was all in private health facilities.

Construction of private health facilities grew 1.2 percent, versus an increase of 0.2 percent for private non-health facilities. Private health facilities construction starts accounted for less than 4 percent of private nonresidential construction starts. Construction of public health facilities dropped by 1.5 percent. However, construction of other public facilities dropped by even more, 1.8 percent. In other words, health facilities construction outpaced non-health construction by 1.0 percentage points in the private construction market, versus only 0.3 percentage points in the public construction market (Table I).

For the twelve months ending last October, there was a significant difference in trend between private and public construction. Non-health private construction increased 4.3 percent, while private health facilities construction increased 7.1 percent. Public non-health facilities construction increased 2.1 percent, while public non-health facilities construction dropped by 1.9 percent.

The latest data suggests private investors have recovered their confidence in future revenue growth in hospitals and other facilities.

 

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