The sluggish economy has taken its toll on the construction industry, but healthcare is doing its part to keep the concrete flowing and the pneumatic hammers hammering.
With new hospitals replacing old ones, additions being built to accommodate all-private rooms, heart and cancer specialty hospitals introducing competition, and green-field hospitals sprouting up to follow suburban migration, healthcare construction may not be recession-proof, but its becoming recognized as recession-resistant.
Thats a good way of putting it, says Steve Gressel, a senior vice president with engineering and construction company Skanska USA Buildings National Healthcare Center of Excellence. Healthcare construction is still going strong. Its not subject to the same cyclical economic trends.
Experts offer varying comparative numbers and apparently gaze into different crystal balls in projecting how the level of competition for healthcare construction contracts will affect prices, but they all agree that its one segment of the industry thats performing better than most. In fact, Jim Haughey, chief economist with Reed Construction Data, reports that contracts representing a record dollar amount of healthcare construction were signed in June.
This June was the best month ever, Haughey says, explaining that $2.7 billion worth of healthcare construction work was agreed to during that month. Thats the value of contracts signedwhat the contractor says hell take to build the entire project.
July, however, fell to $1.6 billion, which Haughey describes as an average-minus monthly total, but he says the deals signed in June will keep people busy for the next 18 months.
Dan White, a vice president in the Chicago office of the Baltimore-based architecture and engineering firm of RTKL, agrees that healthcare construction should remain healthy through the rest of this year and next.
The overall market for healthcare is strong and, if the overall volume of requests for proposals is any indication, the overall market for next year should be strong as well, White says, adding that healthcare construction in the past several years has accounted for about 22% of his companys revenue, rising to about 28% now.