The value of U.S. hospital and clinic construction starts for January 2008 equaled about $1.42 billion, which represents a 3.6% drop from the $1.48 billion reported in January 2007, according to Reed Construction Data, an Atlanta-based subsidiary of publisher Reed Business Information.
January 2008 construction starts for all industries, however, were down 13.1% from January 2007 and were valued at $21.35 billion. You would need a very deep recession to see a significant dip in hospital construction, so there's not enough of a problem out there to be worried for the next two years, said Jim Haughey, chief economist for Reed Construction Data. Its a reasonably steady market as it always has been. It's not like the hotel industry with 60% increases one year and 60% decreases the next.
Unlike retail construction, Haughey said healthcare projects typically don't stop once they get started. Also, while hospital construction remains stable, nursing home construction continues to boom. Haughey said industry consolidation, caused by small operators being bought out by corporations with more access to capital, led to a 46% increase in the value of construction starts in 2007 over 2006: with projects valued at $5.21 billion last year compared to $3.57 billion the year before. He added that much of this was spent on upgrades rather than expansion. -- by Andis Robeznieks