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Study: Global Infrastructure Value

Wednesday, November 4, 2015

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A global design and consultancy firm for natural and built assets took a look at the state of infrastructure around the world and assigned each a dollar value as a measuring stick for comparison.

Arcadis, based in Amsterdam, The Netherlands, collected data from the World Bank, the International Monetary Fund and statistics offices from various countries to deliver its analysis of the value of each country’s “built assets”—highways, bridges airports, dams and levees, buildings and other physical structures.

The Arcadis Global Built Asset Wealth Index 2015 makes a connection between the distribution of the world’s wealth and the built assets within a country that contributes to its productivity, it says, stating “A prosperous society is underpinned by a well-developed built environment.”

iStock.com / asterix0597
© iStock.com / asterix0597

A global design and consultancy firm has delivered its analysis of the value of various countries' “built assets”—highways, bridges airports, dams and levees, buildings and other physical structures.

Unlike other studies that give value to abstract assets like intellectual property and software, Gizmodo says in its summary of the report findings, the Arcadis analysis focuses in on only those objects with physical value.

The study calculates the value of buildings and infrastructure in 32 countries, which make up about 87 percent of the Gross Domestic Product.

From this pool, the world’s “built asset wealth” is valued at $218 trillion (all dollar values are reported here in USD), according to the research. This is an $8 trillion dollar rise from 2013 and is equal to more than $30,000 for every person on Earth.

Breaking It Down

In its rankings, China takes the top spot as global leader in built asset wealth, showing a built asset value of $47.6 trillion.

The United States takes the number two spot with a built asset value of $36.8 trillion.

According to Arcadis, China has surpassed all other nations with an investment of $33 trillion in its built environment. In comparison, Arcadis says China invests 9 percent of its GDP in infrastructure, while the U.S. invests just 2 percent.

In terms of spending per person, Qatar claims the top spot as richest built asset population, valued at $198,000 per capita. (Singapore comes in second at $192,000.)

While Arcadis applauds Qatar as having the fastest-growing construction industry in the Gulf, expanding at an annual rate of 18 percent, Gizmodo clarifies that Qatar has an advantage in this metric, as it is a small country making big investments in its infrastructure.

This size factor keeps the U.S. entirely out of per capita ranking.

iStock.com / ivanastar
© iStock.com / ivanastar

“A prosperous society is underpinned by a well-developed built environment,” Arcadis wrote in its report.

In terms of asset depreciation, Arcadis finds that most G7 countries have experienced a “net de-investment” since 2012.

Japan experienced the largest loss among those reported. Japan’s built asset stock was reduced by $4.6 trillion, a 20 percent loss since 2012.

The U.S. in Focus

In general, Gizmodo reports, the U.S. is falling in the rankings. The problem isn’t in real estate areas like residential and non-residential buildings, according to Arcadis’ data. Rather, infrastructure—especially in high-growth cities, the site writes—hurts the U.S. and its productivity as a country.

Arcadis’ Julien Cayet is quoted as saying “There is increasing concern about the negative impact an underperforming built environment has on the economic prosperity of U.S. cities.”  He was referring to Politico survey that revealed that many U.S. mayors cite infrastructure as the biggest obstacle in their cities.

“In other words, if cities don’t figure out a way to upgrade their roads, parks, and transit systems, their growth is going to stall out,” the site writes.

Cayet also singles out the impact severe weather can have on U.S. infrastructure spending.

“From drought in California to hurricanes in New Orleans and New York, there is an urgent need to build more resilient cities to protect the public and the economy from these devastating events,” he said. “The economic impact of Hurricane Sandy alone is estimated at over $70 billion.”

What Lies Ahead?

Between now and 2025, Arcadis predicts that China’s built asset stock will be worth more than twice as much as that in the U.S. Further, it will be greater than those of the next four nations (currently Japan, India, Germany and Russia) combined.

In the process, the majority of built asset wealth will transition from being situated in the West to the East.

In the meantime, the company advises countries make long-term investments in the built assets that form the foundations of their economies.

“In the race for built asset wealth, the overall winners will be those who consider the full lifecycle of their assets—creating a strategic plan for infrastructure and buildings that are built to last and sustaining economic and social development side by side,” it concludes.

   

Tagged categories: Airports; Bridges; Business conditions; Infrastructure; Locks and dams; Market research; Roads/Highways

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