Healthcare constructiongrowth will slow to 10%

August 01, 2007 |

Healthcare construction spending was 18% higher in mid-2007 than a year earlier and is expected to continue expanding through next year, although growth will slow to about 10% annually.

Spending for nursing homes and other residential healthcare facilities was 28% higher the first five months of 2007 than during the same months last year. Hospitals showed a 20% gain, while medical office building dropped 1% from the same period last year.

Looking ahead, the small nursing home market will continue to expand faster than hospitals. The value of construction starts gained 30% year-to-date for nursing homes (hospitals were up only 12%), but a decline in nursing home starts during the last few months suggests that market expansion is slowing. The nursing home boom is fueled by market consolidation and privatization, which provide access to new sources of capital.

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