Infrastructure-Driven Growth in U.S. Healthcare Construction: Strategic PPPs and Rising Demand Fuel Long-Term Value for Skanska

The U.S. healthcare construction sector is undergoing a transformative phase, driven by demographic shifts, technological innovation, and a reimagining of healthcare delivery models. With the market projected to grow at a compound annual growth rate (CAGR) of 5.3% from 2023 to 2030, construction firms are capitalizing on infrastructure-driven opportunities. Among them, Skanska AB (STO:SKB B) stands out as a strategic player leveraging public-private partnerships (PPPs) and rising healthcare demand to unlock long-term value. This article explores how Skanska's approach aligns with sector trends and positions it as a compelling investment opportunity.

Market Dynamics: A Sector Built for Growth

The U.S. healthcare construction market is expanding rapidly, fueled by an aging population, the shift toward outpatient care, and post-pandemic infrastructure modernization. By 2025, healthcare construction spending had reached $69.78 billion, reflecting a 2.1% year-over-year increase. This growth is underpinned by a global healthcare construction market expected to surge from $284.6 billion in 2024 to $442.0 billion by 2034 (CAGR of 4.5%).

Key drivers include:
- Demographic Shifts: The U.S. population aged 65+ is projected to grow by 20% by 2030, increasing demand for specialized care facilities.
- Outpatient Care Expansion: Ambulatory surgical centers (ASCs) are growing at a CAGR of 12.3%, offering cost-effective alternatives to inpatient care.
- Resilience and Sustainability: Hospitals are prioritizing seismic-resistant designs, energy-efficient systems, and modular construction to future-proof facilities.

Skanska's Strategic Positioning: PPPs and Innovation

Skanska has emerged as a leader in healthcare construction through its expertise in public-private partnerships (PPPs) and innovative project delivery methods. The firm's ability to secure large-scale contracts while mitigating risks for clients has positioned it at the forefront of the sector.

Case Study: Lee Health Golisano Children's Hospital (Fort Myers, FL)

One of Skanska's most notable PPPs is the $435 million Golisano Children's Hospital of Southwest Florida, a joint venture with Lee Health. The project includes a 38,600-square-meter hospital, a central energy plant, and a 11,600-square-meter medical office building. By co-locating design and construction teams in a “Big Room” environment, Skanska achieved a 10% reduction in project costs and a 15% faster timeline. The hospital, set to open in late 2027, will serve as a regional hub for pediatric care, consolidating services into a single facility.

Innovation in Project Delivery

Skanska's use of Integrated Project Delivery (IPD) and design-assist methodologies has become a hallmark of its success. For example, the UNC Rex Healthcare Heart and Vascular Hospital in North Carolina was completed three months ahead of schedule, with budget savings redirected to outfit an additional floor. Similarly, the University of Washington Medical Center Montlake Tower Expansion leveraged prefabrication and Building Information Modeling (BIM) to save $3.5 million and 10 weeks of construction time.

Rising Demand and Skanska's Portfolio

The firm's project pipeline reflects the sector's evolving needs:
- Micro-Hospitals: Compact facilities like Nutex Health's 20,000-square-foot micro-hospital in Albuquerque, which Skanska helped design, are gaining traction in underserved areas.
- Specialized Care Centers: Projects such as the UF Health Shands Cardiovascular/Neuroscience Hospital Expansion highlight Skanska's focus on niche, high-demand services.
- Sustainability Integration: The University of Virginia Health System's University Hospital Expansion aims for LEED Silver certification, aligning with healthcare providers' push for eco-friendly infrastructure.

Investment Implications: Balancing Risks and Rewards

While the sector faces challenges—such as rising material costs (steel and rebar prices up 15% since 2019) and regulatory hurdles—Skanska's strategic partnerships and operational efficiency mitigate these risks. The firm's emphasis on local subcontractor participation (e.g., 55% local and 22% minority subcontractors in the Golisano project) reduces supply chain bottlenecks and enhances community goodwill.

For investors, Skanska's $435 million PPP in Florida and its $119 billion projected healthcare construction spending under the design-build model (CAGR of 4.6% from 2024–2028) signal robust growth potential. The firm's ability to secure long-term contracts with healthcare systems, combined with its track record of cost savings and innovation, positions it to outperform peers in a competitive market.

Conclusion: A Resilient Play in a High-Growth Sector

The U.S. healthcare construction sector is a cornerstone of infrastructure-driven growth, with Skanska at the vanguard of this transformation. By aligning with public-private partnerships, adopting cutting-edge construction methods, and addressing the sector's evolving needs, the firm is well-positioned to capitalize on a $442 billion global market by 2034. For investors seeking exposure to a resilient, high-margin industry, Skanska offers a compelling case study in strategic execution and long-term value creation.

Investment Recommendation: Given Skanska's strong project pipeline, innovative delivery models, and alignment with secular trends in healthcare infrastructure, the firm is a buy for investors with a 3–5 year horizon. Monitor its progress on the Golisano Children's Hospital project and its ability to secure additional PPPs in 2026.