Health-care construction spending regains strength
Construction spending in the health-care subsector has been growing at a solid clip throughout 2001. Although the pace is expected to ease over the final third of 2001, full-year growth will be on par with the 6.4 percent gain recorded in 2000. During the first seven months of 2001, health-care construction totaled $11.25 billion, an increase of 8.8 percent from the January-July 2000 total.
Health-care construction had declined during 1998 and 1999. The publicly funded portion of the market — about 25 percent of the total in a typical year — saw spending fall steeply over the two-year period, while privately funded work treaded water during that time. During 2000, privately funded spending increased by 7.7 percent while public work expanded by a smaller 1.9 percent.
Through the first seven months of 2001, the private market recorded growth of a very strong 12.3 percent, while publicly funded work came up 3.4 percent short of its January-July 2000 total.
Despite challenges the nation faces on both geopolitical and economic fronts, health-care construction is expected to grow by 6.5 percent this year. Growth is expected to slow but remain positive in 2002. The forecasted 3.6 percent gain assumes that some public monies will be diverted away from health care to fund defense, security and other priorities. Low interest rates will support modest gains in the private market.