Healthcare construction sector sees hike in activity

Medical projects continue despite lockdown, Barbour ABI report states

There is some evidence the construction sector is improving as staff come back from furlough

There are signs the construction market is recovering following the outbreak of COVID-19, with the medical sector, in particular, bucking the trend of contract delays and cancellations.

In its 10th COVID-19 Construction Briefing, Barbour ABI reported a small increase in open projects and a fall in delayed projects across all sectors.

And it estimates those projects which are facing delays will be put back by, on average, six months.

The total number of ‘open projects’ has increased in value by £2.2billion, with 2,200 schemes with a combined value of £79billion.

Once again most of the increase has occurred in the residential sector.

We are hopeful that the exceptionally-weak contracts and tender information since the start of the crisis will be starting to improve

Restarted projects have also increased by £1.3billion and now total £33billion, while delayed projects have dropped by £3.6billion to £47billion.

In the planning system, over the last few weeks new tenders have also recovered somewhat to approximately 30% lower than pre-crisis levels, rather than 40% reported through March and April.

Returning to work

And, while new applications remain stable, decision updates are weakening slightly.

The report states: “This week our research findings have focused around concerns over delays in projects under construction, with on-site productivity and breach of contracts major issues.

“We have some evidence to support the slight pick-up in tenders we have observed as staff return from furlough.

“Hopefully this will lead to increases in new projects over the coming weeks.”

It adds: “Several respondents said they were concerned about the difficulties maintaining productivity and achieving contract milestones.

“We also picked up a number of projects with new later completion dates.

“On average project completions are being put back by approximately six months.

“We are starting to collect tentative evidence that as previously-furloughed staff are now returning to work, new tenders are back underway.

We have some evidence to support the slight pick-up in tenders we have observed as staff return from furlough

“[And] we are hopeful that the exceptionally-weak contracts and tender information since the start of the crisis will be starting to improve.

Leading the way

“From our planning information it appears new tenders may be starting to increase and we will be looking for this in our data over coming weeks.”

The medical sector remains the sub sector with the most confirmed open projects.

“Public hospitals, somewhat unsurprisingly, dominate the open projects in the medical sector,” states the report.

“Other sub-sectors with significant amounts of open sites are the private hospitals and hospices, nursing and psychiatric homes.

The medical sector also remains the least impacted by the delays.

Companies