High demand in the Healthcare Sector despite NHS reforms and budget cuts

The UK has one of the largest medical device markets in the world, valued at £5.75 billion in 2011. The domestic market vies with France as the second largest in Western Europe behind Germany. Per capita expenditure is equal to £92. The UK market for medical devices is predicted to increase by 3.6% per annum to attain a value of £7 billion by 2016.

The growth of the UK medical device market is predominantly import-led as many domestic manufacturers are not able to rapidly adjust to changes in demand. This led to a succession of trade deficits since 2001. The import market has not been immune to the recession, however. It has faltered since mid 2008, and the £ total in 2010 is lower than that in 2006.

There was a period of huge growth in public health spending under the Labour government after 2001, which saw the NHS budget almost triple. In 2011, total health expenditure is estimated at £140.3 billion. Of this, £118 billion is public, equal to around 84% of the total. Expenditure is set to slow in the wake of the 2009 recession and enormous government deficit, however, the newly-elected (May 2010) Conservative/Liberal-Democrat coalition government has pledged to maintain some sort of growth in recurrent health spending, although this may prove difficult.

The latest published government plans involve a 9% cut in capital health spending in 2011.