Monday, October 3, 2016

Health Facilities Construction Growth Up Amidst General Decline in August

Construction of health facilities significantly outpaced other construction in August. Overall, health facilities construction starts increased 1.2 percent in August, versus a drop of 0.8 percent for other construction. Further, both private and public health facilities construction grew.

Construction of private health facilities grew 0.6 percent, versus a drop of 0.4 percent for other private construction. Construction of public health facilities increased a whopping 3.6 percent, versus a drop of 2.2 percent for other public construction. Is this what they mean by “infrastructure” spending – broken bridges and roads, while more VA and county hospitals spring up?

See Table I below the fold:


For the twelve months from July 2015, there is a significant difference in trend between private and public construction. Private construction increased 2.6 percent, but private health facilities construction dropped 5.3 percent. Public construction dropped 8.8 percent, but public health facilities construction increased by 6.2 percent.

Overall, health construction dropped 3.1 percent, versus a decrease of 0.2 percent for non-health construction. If the divergence between private and public health facilities construction persists, it will suggest investors expect VA, Medicaid, “uncompensated” care to grow as a share of U.S. health spending, versus private payment.

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