Expectations for Infrastructure Investment Plummet Globally, as COVID-19 Outbreak Shakes Confidence
According to a New Survey Taken Before and After the Hit of COIVD-19, a Lack of Infrastructure Investment Driving Pessimism Around a Post-Virus Economic Recovery
Despite the fact that social infrastructure and water projects - clean water, wastewater operations - are identified as top priorities from private and public sector entities from around the world, a new CG/LA Infrastructure survey shows that global industry leaders are not hopeful about an increase in infrastructure spending following the worldwide spread of the coronavirus.
In its new Global Infrastructure Industry Survey, CG/LA Infrastructure found only 5% believe that investment will “increase significantly” following the pandemic, a sharp decline from 34% before the crisis. In total, only 27% believes that infrastructure investment would increase or increase significantly - a drop from 71%, when asked previously.
Prior to the crisis only 10% of respondents thought that infrastructure investment would decrease (7%), or decrease significantly (3%), but now a majority (52%) believe that infrastructure investment will decline (34%) or decline significantly (18%).
“The data shows that the outbreak of COVID-19 cases worldwide has essentially put a halt to infrastructure investment globally,” said Norman Anderson, Chairman & CEO of CG/LA Infrastructure. “It’s clear that more has to be done - whether it is building more hospitals or schools, or other key projects delivering high quality benefits such as clean water and irrigation systems - particularly in developing countries. Given that infrastructure needs to be a driver of the global economic recovery, obviously these results are deeply troubling.”
A critical theme emerging from the survey is that 82% of respondents view infrastructure as a weak or average brand. Only 18% identified infrastructure as a strong brand - the vast majority saw it as problematic, or characterized by incompetence and, especially, chronic corruption.
Overall, given the lack of public trust in the infrastructure brand there is an urgent need to address emerging markets infrastructure. Other findings include 28% selected social infrastructure (i.e. new hospitals, and schools) as their top priority, with 55% listing it as one of their top three priorities. Clean water was highlighted as the top priority by 14% and was included in a top three priority by 48% of respondents. Transit and highways (12%) and wastewater (11%) were other top areas cited as in need of investment.
“As fears around the extent of the global recession increase, it is important that the U.S. government and multilateral institutions understand the depth of this problem,” said Anderson. “Given this acute crisis, now is the time for leadership, an investment model that will allow local economies to recover, and real attention to the benefits that infrastructure brings to people – not just jobs, but health, and a sense of confidence in the future.”
The Global Infrastructure Industry Survey was conducted from March 19-30 to over 13,000 global respondents in engineering/construction, finance, public sector, and technology fields. In a separate recent survey, 94% of U.S. infrastructure executives agreed that an infrastructure stimulus was critical for the U.S. to emerge quickly from the current crisis. 94% of respondents also believe that the U.S. should increase private infrastructure investment.
The full list of countries that participated in the survey (in alphabetical order) are:
Afghanistan, Argentina, Bahamas, Brazil, Canada, Chile, China, Colombia, Costa Rica, Denmark, Dominican Republic, Egypt, El Salvador, France, Georgia, Germany, Guatemala, Indonesia, Iraq, Israel, Italy, Japan, Kuwait, Mexico, Nepal, The Netherlands, Norway, Oman, Paraguay, Peru, Saudi Arabia, Serbia, Singapore, Spain, New Zealand, UAE, Ukraine, United Kingdom, Uruguay.
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