The UK construction industry has witnessed varied performance across its sectors in June 2024, with notable growth in health project starts.
- Health project starts increased by 14% on the previous quarter and 129% from the previous year, totalling £1.645bn.
- Major projects, especially those above £100m, soared by 400% on the previous quarter.
- Main contract awards and detailed planning approvals showcased mixed results, with significant regional variations.
- Despite some areas thriving, underlying health sector developments have declined on several metrics.
The UK construction industry exhibited a diverse performance in June 2024, particularly within the health sector. Health project starts witnessed a significant surge, escalating by 14% compared to the previous quarter and an impressive 129% from the prior year, accumulating a total value of £1.645bn. This noteworthy growth highlights the rising momentum within the sector, primarily driven by substantial investments in major projects.
Project commencements valued at £100m or more experienced remarkable expansion, registering a 400% increase over the past quarter. Such a surge starkly contrasts with the preceding year, which observed no comparable project initiations. However, this growth in major projects masks a decline in smaller undertakings. Projects valued at under £100m noted a contraction of 32% against the previous quarter, reflecting a 19% year-on-year decrease.
In the realm of main contract awards, a decline was evident. Total awards amounted to £658m, marking a 45% drop from the preceding quarter and a 21% reduction from the previous year. Major project awards aggregated £190m, down by 25% from the previous quarter. This downturn was somewhat offset by the absence of such awards in the prior year. Yet, minor contract awards saw an even steeper decline, plummeting by 47% quarter-on-quarter and 44% annually.
Detailed planning approvals offered a mixed view. Totalling £1.847bn, approvals rose by 33% from the prior quarter but were 24% lower than last year. While major project approvals nearly tripled this quarter, they still registered a 28% year-on-year drop. On the other hand, smaller project approvals showed a modest increase of 7% compared to the previous three months, though they remain 20% below last year’s figures.
Regional disparities were prominent in the health sector’s performance. London emerged as a dynamic hub, contributing £614m to project starts, primarily boosted by the £500m Canary Wharf North Quay Life Science Building. The South East and Wales also demonstrated significant growth, whereas the East of England experienced a notable decline. In detailed planning, Scotland led with approvals worth £738m, driven by the Monklands Replacement Project.
Health sector activity diverged between project types as well. Hospital projects accounted for a substantial 44% of the sector’s starts, soaring by 172% from the previous year, amounting to £712m. Conversely, nursing home initiations receded by 37%, and dental, health, and veterinary centres dropped dramatically by 85%, totalling just £17m. Distinctions in project type contribute to the sector’s overall fluctuating landscape.
The UK’s health sector in construction demonstrates dynamic shifts with significant regional and project-type variations, highlighting challenges and opportunities.
