This morning’s release of construction spending from the U.S. Census Bureau indicates spending on health facilities actually shrank a little in May, a significant downturn from the previous release (see Table I, below the fold). Total construction spending amounted to about $1 trillion, of which $39 billion was health care. Health construction spending shrank 0.6 percent from April and grew only 3.1 percent year on year. Total construction spending, less health, grew 0.9 percent on the month, and 8.4 percent year on year.

We look at this because other economic data indicate that health spending is consuming more of our prosperity. Low, even shrinking, spending on construction of health facilities may represent the consolidation of hospitals that many fear will lead to increasing prices. Continue reading Shrinking Health Construction Spending: Consolidation to Blame? →

In response to some comments about the role of health facilities construction in the economy, I’ve decided to add a few lines about today’s construction spending report from the U.S. Census Bureau.

Year on year, total construction spending increased by 4.8 percent through April, to just over one trillion dollars, of which about 40 billion dollars (four percent) was health facilities construction. Health construction spending grew only 2.6 percent, much less than all construction and the 9.2 percent growth in nonresidential non-health construction.

$725 billion of the total construction spending was private, of which a little less than half was residential and a little more than half nonresidential. Private health facilities construction accounted for $31 billion, an increase of 7.5 percent, versus 13.9 percent growth in private nonresidential non-health construction. (Private residential construction collapsed over the twelve months.)

$9 billion of government health construction spending comprised 3.24 percent of all government construction spending ($281 billion), and dropped by 11 percent over the twelve months.