In addition to the broader downturn facing the construction sector, hospitals faced a high degree of fiscal uncertainty due to the Patient Protection and Affordable Care Act.
New York, NY (PRWEB) February 26, 2015
The Hospital Construction industry has faced challenging conditions in the five years to 2015 that have led revenue to decline overall during the period. According to IBISWorld Industry Analyst Edward Rivera, “In addition to the broader downturn facing the construction sector, hospitals faced a high degree of fiscal uncertainty due to the Patient Protection and Affordable Care Act.” Moreover, low profit margins during the economic recovery forced hospitals to shelve expansion plans and new construction work. However, after four years of steady declines since 2010, IBISWorld projects the industry to begin a rebound in 2015. Increased access to credit and low interest rates will enable industry operators to service pent-up demand.
The Hospital Construction industry encompasses both private and public hospital construction. “Gains in public hospital construction have helped offset the industry's losses due to rising demand for hospital construction by the federal departments of Defense and Veterans Affairs,” says Rivera. “In 2012, however, this trend reversed itself as reduced tax revenue caused states and local governments to cut funding for municipal construction projects.” Consequently, in recent years, public hospital construction has fallen at a faster rate than private hospital construction.
Over the next five years, however, the Hospital Construction industry is anticipated to rebound. Revenue is expected to grow steadily from 2015 to 2020 as the Patient Protection and Affordable Care Act expands health coverage to more than 32.0 million individuals, driving up the demand for hospital services. The gradual aging of the US population will also result in greater demand for hospitals. Hospital construction will also benefit from low interest rates, which will lower the costs of financing construction projects.
For more information, visit IBISWorld’s Hospital Construction in the US industry report page.
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IBISWorld industry Report Key Topics
The industry includes operators that engage in new work, additions and reconstruction projects for hospitals. These include both private and public hospital construction projects.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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