The outlook for healthcare projects in 2022 continued to strengthen in the 4th quarter of 2021 based on proposal activity tracked by PSMJ Resources’ Quarterly Market Forecast survey of architecture, engineering and construction firm leaders. The major healthcare market’s net plus-minus index improved to 57.4, up from 54.8 in the third quarter.
Healthcare’s NPMI was the fifth-highest of 12 major markets in the fourth quarter, trailing only the water/wastewater, environmental, energy/utilities and housing markets.
PSMJ’s NPMI expresses the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease. The QMF has proven to be a solid predictor of market health for the A/E/C industry since its inception in 2003. A consistent group of over 300 firm leaders participate regularly, with 187 contributing to the most recent survey.
Healthcare Market Proposal Activity – Year End 2007 to Fourth Quarter 2021
“The healthcare market had a little bit of a dip when the crisis first hit, when a lot of the healthcare providers were having some revenue problems,” says PSMJ Director David Burstein, P.E., AECPM. “But they seem to have overcome those, and they are allocating money for capital projects again.”
Adding to the improved outlook, three of the four healthcare submarkets tracked by the survey also reported better NPMI scores, quarter over quarter. Medical office buildings recorded the highest healthcare submarket NPMI at 54.7 (up from 50.0 in the third quarter), followed by continuing care facilities at 53.8 (up from 42.6), laboratories (53.2, up from 50.9) and hospitals (46.0, basically flat off a 46.6 NPMI in the third quarter).
Jeffrey Meyers, principal architect for Cleveland, Ohio-based DS Architecture, says that much of the resources invested into healthcare facilities during COVID were understandably aimed at treating people with the disease, but that investment is likely to eventually shift toward physical changes to better address subsequent outbreaks.
“The codes are going to dictate what we do,” says Meyers, who counts the top-rated Cleveland Clinic, University Hospitals and Metro Health, and Akron Children’s Hospital, among the firm’s clients. “The codes are going to mandate change and then we’ll see a boom.”
The survey also tracks the senior/assisted living market as a housing submarket. Its index score also jumped in the fourth quarter, rising more than 10 points, from 35.1 in the third quarter to 46.2 in the fourth quarter.
Survey respondents said that proposal activity in the healthcare market was active across all regions, with the Midwest and South leading the way. All U.S. regions topped 50.0 in fourth quarter NPMI.