Impact of Slowing World Growth on the Infrastructure Market · GLOBAL INFRASTRUCTURE HUB April 2016...

April 2016

Impact of Slowing World

Growth on the Infrastructure

Market

GLOBAL INFRASTRUCTURE HUB 2April 2016

GDP growth forecast revisions by IMF

Quarterly update Revision to 2 year forecast

2016 Q1 0.10%

2015 Q4 0.20%

2015 Q3 0.10%

2015 Q2 0.05%

2015 Q1 No change

2014 Q4 0.15%

2014 Q3 0.05%

2014 Q2 0.05%

Source: IMF, GI Hub’s analysis


Average inflation rate of 10 largest economies*

Source: The World Bank, The Hub’s analysis

* Countries are the United States, United Kingdom, Russia, Japan, Italy, India, Germany, France, China and Brazil

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3.8%

2.6%


Public capital stock growth vs GDP growth

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Per

ce

nt

Western Europe

Source: International Monetary Fund, The World Bank, The Hub’s analysis

* Western Europe is defined as the United Kingdom Germany, France and the Netherlands

10 year moving average of

change in GDP

10 year moving average of

change in public capital stock


Cumulative increase in economic output from investing

1 per cent of GDP in public investment

0.4%

1.5%

0.0%

0.5%

1.0%

1.5%

2.0%

Year 0 Year 4

Per

ce

nt

Source: International Monetary Fund, The Hub’s analysis

“…public investment

shocks have statistically

significant and long-

lasting effects on

[economic] output.”


Ciudad Real Central Airport

• 1.1b Euro cost

• 10m passengers p.a capacity

o Only attracted a few ‘000

• Closed after 3 years of

operation

• Was in receivership, sold in

September 2015 for 28m Euro


Cumulative increase in economic output from investing

1 per cent of GDP in public investment

Source: International Monetary Fund, GI Hub analysis

0.4%

1.5%0.4%

1.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Year 0 Year 4

Per

ce

nt

2.6%

0.8%


$US 57 trillion needed by 2030

Source: McKinsey & Company, GI Hub analysis


Large supply of private investment capital, however

only 1.6%* invested in infrastructure

2232

4152

66

83

106

0

40

80

120

2000 2005 2010 2015 2020 2025 2030

6% p.a

5% p.a

Global pension, life insurance, and SWF assets under management ($US trillions)

* OECD 2014


Pennsylvania Rapid Bridge Replacement Project


Australia is adding 4 million more people every decade

2016 2061

24m42m

Source: Australian Bureau of Statistics


“We work to facilitate a better supply of quality, bankable

government infrastructure projects to the private sector.”

What is GI Hub doing?


Thank you, and to our partners and funders

Impact of Slowing World Growth on the Infrastructure Market · GLOBAL INFRASTRUCTURE HUB April 2016...

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