Doctor’s Orders: Hospital Construction in the US Industry Market Research Report Now Available from IBISWorld

Over the next five years, the Hospital Construction industry is expected to enter into a recovery period as the US population ages and the implementation of the Patient Protection and Affordable Care Act gives more than 32 million individuals access to healthcare insurance coverage, driving up the demand for hospital services. For these reasons, industry research firm IBISWorld has added a report on the Hospital Construction industry to its growing industry report collection.

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Low tax revenue has caused governments to cut funding for municipal construction projects

Los Angeles, CA (PRWEB) May 02, 2013

The Hospital Construction industry has faced challenging conditions over the past five years, with industry revenue contracting at an annualized rate of 4.3% to $27.1 billion. In addition to the broader downturn facing the construction sector, hospitals faced a high degree of fiscal uncertainty due to potential changes from the Patient Protection and Affordable Care Act. Furthermore, “because of low profit margins during the recession, hospitals shelved expansion plans and new construction work due to lower available cash to finance these projects,” says IBISWorld industry analyst Caitlin Moldvay. In 2013, industry revenue is expected to continue declining, falling 2.6% during the year, based on the latest available monthly data from the US Census. In particular, demand for public hospital construction is expected to fall at a faster rate than private construction during the year.

The Hospital Construction industry includes both private and public hospital construction; private hospital construction makes up 73.2% of the total. “From 2008 to 2011, gains in public hospital construction helped mitigate the industry's losses due to rising demand for hospital construction by the federal departments of Defense and Veterans Affairs,” says Moldvay. “In 2012, however, this trend reversed itself as reduced tax revenue has 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, the Hospital Construction industry is expected to enter into a recovery period. The implementation of the Patient Protection and Affordable Care Act will result in more than 32 million individuals gaining access to healthcare insurance coverage, driving up the demand for hospital services. Furthermore, 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 enable lower borrowing costs for financing construction projects. In line with the construction sector in general, the largest firms in the industry are general contractors. On large-scale projects, these players often hire subcontractor firms that undertake distinct, specialized segments of the construction process. These subcontractors represent the majority of industry participants, and typically compete solely on a local or regional basis, contributing to industry fragmentation. The narrow scope of this industry also decreases larger firms' market shares and decreases concentration. Current major companies include Turner Construction Company and McCarthy Holdings Inc. 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.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.


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  • Gavin Smith
    IBISWorld
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