Technologically advanced, sustainable and resilient infrastructure can pave the way for an inclusive post-COVID economic recovery. Low- and middle-income countries could see $4 return for every $1 spent on building infrastructure that focuses on long-term resilience.”
Countries around the globe are set to launch the biggest round of infrastructure investment since the post-2008 financial crisis stimulus measuresWorld Economic Forum, 2020
Public and private infrastructure assets have historically offered the following attractive characteristics:
Global listed infrastructure EBITDA remained positive through the 2008 global financial crisis
Global listed infrastructure vs global equities EBITDA growth since 2004
Infrastructure’s key strengths in the current environment
** As of May 31, 2020 the S&P Global INFRA INDEX WAS DOWN 18.34%. [S&P GLOBAL INFRA INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE INFRASTRUCTURE MARKET.]
Spending shortfalls—projected to totalsome $5.5 trillion worldwide when compared with the level needed to maintain current GDP growth—are already straining global infrastructure.McKinsey Global Institute, December 31, 2019
Key drivers of infrastructure investing
Global urbanization is increasing demand for new infrastructure
|2018 – 2035 Projection|
|5||Al-Qahirah (Cairo), Egypt||8.4||42%|
|6||Mumbai (Bombay), India||7.4||37%|
|8||Mexico City, Mexico||3.8||18%|
|10||São Paulo, Brazil||2.8||13%|
|13||New York-Newark, US||2.0||11%|
|15||Kolkata (Calcutta), India||4.9||33%|
|18||Kinki M.M.A. (Osaka), Japan||-0.9||-5%|
|21||Buenos Aires, Argentina||2.2||14%|
|22||Guangzhou, Guangdong, China||4.1||32%|
|24||Chennai (Madras), India||4.9||47%|
Cumulative Infrastructure Investment at current trends vs needs (US$tn)
Total forecast infrastructure gaps mapped out
Population growth putting a strain on current infrastructure
The UN estimates that the world’s population is projected to grow from 7.5bn in 2017 to reach 9.8bn by 2050
Government infrastructure spending is center stage
|Belt and Road Initiative||Nationwide public safety broadband network|
|Bridge improvements a must||Increased infrastructure investment a must for economic growth & recovery|
|Reduce congestion while connecting urban and rural||Targeted to incentivize much needed private sector investment|
Post COVID-19 world — we expect global demand for infrastructure spending to increase
Republicans and Democrats are in agreement on the crucial need for national infrastructure spending for both current and long term needs
Potential impact of a $2 trillion spending package over 10 years on the US economy2
Infrastructure spending plans are already being announced at the state level
Infrastructure investment is already rising in China as it recovers from the COVID-19 crisis5
The rest of the world is following suit accelerating infrastructure spending plans
1 New York Times article “Trump and Democrats Agree to Pursue US$2 Trillion Infrastructure Plan”, April 30, 2020.
2 Source: Infrastructure: What Once Was Lost Can Now Be Found — The Productivity Boost, S&P Global, April 2020.
3 Illinois.gov, May 12, 2020.
4 USDA.gov, May 13, 2020.
5 HSBC Global Research, May 15, 2020.
6 Morgan Stanley Research, June 1, 2020.
7 Source: Investment Week, March 11, 2020.
8 Source: Construct Connect, May 14, 2020.
9 Source: Thomson Reuters, May 14, 2020.