Healthcare Report: Double-digit growth continues for the surging healthcare sector

Healthcare construction spending increased 14% over the last 12 months and is expected to continue expanding at the same pace through 2008. Healthcare starts, reported by Reed Construction Data, increased 16% in 2006 and are expanding at an 11% pace in 2007 through May.

Construction spending for hospitals jumped 23% in 2006. While spending is unchanged so far in 2007, it is expected to resume growing later this year with the rebounding economy. Spending for specialty medical buildings, such as offices and labs, dropped 11% in 2006, but has not fallen further so far in 2007.

Spending for nursing homes and other residential medical buildings increased 32% in 2006 and has continued to expand nearly as fast in early 2007. The recent surge in this market is expected to continue through next year, and is partly encroaching on the multifamily home market by offering a more attractive arrangement in a medical setting.