PUBLIC SECTOR
FOCUS ON: HEALTHCARE CONSTRUCTION
Healthcare is a major sector for the floorcoverings market accounting for 15% of contract flooring sales. Despite a decline in health sector construction, the demand for flooring looks set to remain positive going into the future.
HEALTHCARE
CONSTRUCTION MARKET Having peaked at £5.9bn in 2008, health sector construction output has subsequently declined by almost 50% to around £3bn in 2014. Cuts to the capital budget initiated by the Government since April 2011 have had a significant impact on health construction work, and there has been a move away from public finance initiative (PFI) funded larger-scale hospital development towards smaller scale local health authority controlled programmes.
Recently, emphasis has been placed on smaller projects, such as local community hospitals and combined GP surgeries/health centres. The majority of health construction projects are now likely to be procured under P21+ with a
HEALTHCARE RMI In contrast to new build, health sector repair, maintenance and improvement (RMI) is forecast to be more buoyant as plans for service delivery on a local level are pursued. Into the longer-term, the issue of an ageing population will boost demand for both new build and RMI due to need to increase nursing/care home places.
Currently valued at well over £1bn, the healthcare RMI market has shown reasonable growth over the last decade, with growth underpinned by a
28
focus on refurbishment projects, forming part of the NHS estate rationalisation programme.
The total size of the NHS estate, by floor area, has reduced by 4.4% between 2012/13 to 2013/14. This equates to a decrease of over 1.2million m2 space across the NHS estate.
of floor
However, healthcare is a considerable sector for floorcoverings, accounting for around 15% share of contract/ non-residential flooring sales. While healthcare has been a major sector for vinyl flooring suppliers, it also represents a notable sector for carpets and other materials, reflecting the diversity of health facilities.
Prospects for flooring suppliers and installers remain positive in the longer term, particularly in sectors such as GP surgeries, psychiatric care, nursing homes, dental care etc.
major repair backlog across the public sector, together with upgrading of facilities relating to the outsourcing of minor procedures to GP practices and clinics, chronic disease prevention and increased social care provision.
However, as government cuts have impacted on NHS budgets, the healthcare RMI market has come under pressure. Over the medium term, it is anticipated that the market will experience a slowdown as overall budgets are constrained and funding is channeled towards frontline services.
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