Construction of health facilities slowed in September, along with other construction. Overall, health facilities construction starts declined 0.3 percent in September, versus a drop of 0.4 percent for other construction. Health facilities construction accounted for 6 percent of non-residential construction starts. However, the divergence between private and public continued.
Construction of private health facilities dropped 1.0 percent, versus a drop of 0.2 percent for other private construction. Private health facilities construction starts accounted for almost 8 percent of private nonresidential construction starts. Construction of public health facilities increased a whopping 2.4 percent, versus a drop of 1.0 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 ending last September, there is a significant difference in trend between private and public construction. Non-health private construction increased 5.4 percent, but private health facilities construction dropped 9.5 percent. On the other hand, non-health facilities public construction dropped 8.2 percent, but public health facilities construction increased by 5.7 percent.
Overall, health construction dropped 6.6 percent, versus an increase of 0.1 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.