WASHINGTON, D.C., AND LONDON — At a point in which the global economy is balancing between growth and a return to recession, CG/LA Infrastructure's annual estimate shows that global infrastructure investment is falling short of its target by 10 to 20 percent. In its annual report on global infrastructure, “The Global Infrastructure Marketplace: The World in 2015,” CG/LA forecasts that global demand for infrastructure projects will reach nearly $10 trillion in the period from now until 2015, while investment will fall considerably short of that figure, reaching only $4.5 trillion to $5 trillion.
“The critical fact is that we are not acting; instead, we are sleeping at a time of maximum danger and significant opportunity,” said CG/LA Infrastructure President and CEO Norman F. Anderson. “The world needs to invest — and this is not just an obligation to the next generation, but a way to ensure growth now, and what might be even more important, to widen the creation of opportunities in economies around the world. Policymakers seem exhausted after three years of crisis, but this is when they need to be most active, most creative, and most resourceful.”
The report highlights the role that infrastructure projects such as roads, bridges, mass transit, and ports must play in generating growth and opportunity. It details infrastructure demand and spending in 80 countries during the last 20 years and projects the rate of investment through 2015 under three GDP-growth scenarios.
Key findings include:
• Infrastructure clusters are emerging in countries and regions around the world, including China (which is set to be the largest infrastructure market in the world), but also in Brazil, Canada, and Australia. Among the BRIC’s, India and Russian are falling behind.
• Investment is greatest among commodity producers. Areas of greatest activity tend to be found in regions — producing or receiving — that are involved in the global commodity boom, so Brazil, China, parts of Latin America, Africa, and especially the Middle East have booming infrastructure sectors.
• Key sectors continue to lag. While investment in electricity and highways will account for 65 percent of investments in infrastructure, water distribution and wastewater treatment will receive less than 9 percent of total investments. Urban mass transit will also lag significantly.
• Investment in infrastructure projects in the United States is ceclining. Currently, investments in U.S. projects make up 11 percent of the global infrastructure market, but rather than increasing with economic recovery, investments are declining.
• Africa is emerging as an infrastructure hot spot. Countries such as South Africa, Nigeria, Kenya, and others are preparing for significant infrastructure investments — investors see Africa “as where Latin America was 20 years ago.”
“What you see is not simply lower-than-required investment, but an overall lack of public imagination in terms of long-term infrastructure investment priorities. This issue is most significant in emerging markets — and it is not sustainable,” Anderson added.
CG/LA will release the report as part of a breakfast discussion on the future and growth of infrastructure projects at its 5th Annual Global Infrastructure Leadership Forum in London from Feb. 22-24. The panel will include Enrique Garcia, chairman of CAF, the Latin American Development Bank; Terry Newendorp, chairman and CEO at Taylor-DeJong; Huw Thomas, partner at Foster + Partners; and, Lixing Zou, vice president at the China Development Bank.
For more information, visit www.cg-la.com.