World Economic League Table 2019 - CIOB Academy · 2019. 3. 15. · Link, Malaysia Cost: USD 20 bn...

© Centre for Economics and Business Research, 2018

World Economic League Table 2019

World Economic and Construction Outlook 2019 – is the world economy heading for recession?

Rider Levett Bucknall

Ann BentleyGlobal Board Director

Member of Construction Leadership Council

Email: [email protected]


OVERVIEW OF WORLD ECONOMIC LEAGUE TABLE 2019:

World Economic League Table (WELT) is an annual League Table giving economic

forecasts for 193 countries over a 15-year outlook

▪︎ WELT forecasts size and ranking of countries over time in a League Table of

world economies.

▪︎ Includes country level commentary looking at main developments over the past

year as well as key drivers to growth and headwinds.

▪︎ Highly sought after by press and media across the globe.


WHY RLB SUPPORTS WORLD ECONOMIC LEAGUE TABLE:

▪︎ Comprehensive global coverage.

▪︎ Understanding of construction trends.

▪︎ Strong track record – WELT 2019 is Tenth Edition.

▪︎ Takes account of important technological trends.


TODAY’S AGENDA:

▪ Outlook for the Global Economy – Doug McWilliams, Founder and Deputy

Chairman, Centre for Economics and Business Research

▪︎ World Economic League Table 2019 – Pablo Shah, Senior Economist, Centre

for Economics and Business Research

▪︎ Global Mega Infrastructure and Construction Projects – Mike McWilliams,

Head of Energy, Centre for Economics and Business Research and Senior

Advisor, Hydropower, Mott MacDonald

▪︎ Outlook for the Global Infrastructure and Construction Sector – Graham

Robinson, Director, Global Construction Perspectives and Global Business

Consultant, Pinsent Masons LLP

Outlook for the global economy

• Supertrends

• World GDP

• Oil and commodity prices

• China, the US and the EU

Supertrends

• Populism and inequality

• Globalisation and infrastructure requirements

• Technology and need for new infrastructure

• Cheap energy from new sources plus LPG

• Migration

• The lifestyle economy

Even last year world trade was slowing down….

And the latest data shows world air freight growthhas gone negative

We expect world GDP growth to be sluggish at best in the next 5 years but to get closer to trend 2023-33

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

1998 - 2002 2003 - 2007 2008 - 2012 2013 - 2017 2018 - 2023 2024 - 2028 2029 - 2033

World real GDP growth per cent per annum

Governments are combatting the slowdown with increased fiscal expansion

The economic slowdown and technology are likely to lead to a long term bear market in commodities..

….and even more so in oil, though we were probably too aggressive in our forecasts of oil price decline last year

How China has caught up with and overtaken both Europe and the US…

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2003 2013 2018 2023 2033

Size of economy, current prices $ billions

US China Western Europe

Conclusions

• With luck a recession can be avoided…

• But this will require a lot of policy action including tax cuts and increased infrastructural spend

• But even a slowdown will pour petrol on the embers already warmed by inequality and nationalism

• Likely new alignments as US becomes less influential and more strident

• China and Europe look to have biggest short term risks

• BRI likely to lead to stronger Eurasian links

© Centre for Economics and Business Research ltd

World Economic League Table 2019

© Centre for Economics and Business Research

Movements in WELT rankings, 2003 - 2033

17The Prospects Service

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12

14

2003 2008 2013 2018 2019 2023 2028 2033

WEL

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United States China Japan Germany India




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2003 2008 2013 2018 2019 2023 2028 2033

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France United Kingdom Italy Brazil Canada




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2003 2008 2013 2018 2019 2023 2028 2033

Japan India Korea Russia Turkey


Other notable movements

• Many emerging economies suffered currency collapses in 2018, causing large falls in the rankings for Argentina, Pakistan and Iran.

• Saudi Arabia will fall out of the world’s top 20 by 2028, on the back of weakening oil prices.

• Bangladesh is on course to enter the world’s 25 largest economies by 2032.

© Centre for Economics and Business Research ltd

The mega projects


Global Construction Market

• Global construction spend in 2018 was around $11,500 billion, or 13.5% of global GDP, and is set to grow.

- The Chinese Belt and Road Initiative is funding mega projects across Asia and Africa.

- An infrastructure backlog needs to be addressed to permit planned GDP growth.

- New technologies require new investments in construction.

- Growth is tailing off and governments will use infrastructure spend to boost growth.

• Socio-economic analysis is critical: Supply chain GVA may not accrue to host country, but social and economic payback is often much greater than direct project benefits.


Transport:Massive expansion of metros, HS rail and airports


Lagos-Calabar Railway, NigeriaCost: USD 12 bn

China Pakistan Economic CorridorCost: USD 62 bn

HS2 High Speed Train, UKCost: USD 73 bn

Beijing AirportCost: USD 13 bn

Tokyo – Nagoya MaglevCost: USD 52 bn

B1M Coastal Highway, NorwayCost: USD 47 bn

East Coast Rail Link, MalaysiaCost: USD 20 bn

Kanal Istanbul, TurkeyCost: USD 10 bn

WestConnex, Sydney, AustraliaCost: USD 20 bn

Montreal Light Railway, CanadaCost: USD 5 bn

Riyadh Metro, Saudi ArabiaCost: USD 23 bn

© Centre for Economics and Business Research 24The Prospects Service

Urbanisation:Trend for smart, interconnected mega-cities

Mazdar City, Abu DhabiCost: USD 22 bn

New Clark City, PhilippinesCost: USD 60 bn

Cairo New City, EgyptCost: USD 45 bn

Delhi-Mumbai Corridor, IndiaCost: USD 100 bn

Re-building Christchurch, New ZealandCost: USD 25 bn

Neom City, Saudi ArabiaCost: USD 500 bn

Madinat Al-Hareer, KuwaitCost: USD 132 bn

Khazar Islands , AzerbaijanCost: USD 100 bn


Energy:Smaller projects, but $4 trillion spend by 2033 ($270 bn pa)

Grand Renaissance Dam, EthiopiaCost: USD 5 bn

Inga Hydro-electric, DRCCost: USD 18 bn

Hinkley Point C Nuclear, UKCost: USD 26 bn

Nord Stream 2 Gas, EuropeCost: USD 10 bn

Dasu Hydro-electric, PakistanCost: USD 5 bn

Site C Hydro-electric, CanadaCost: USD 8 bn

Global Energy InterconnectorCost: USD 38,000 bn


Water, science and other projects:Water emerging as a critical issue; science has big budgets

CERN new particle accelerator, SwitzerlandCost: USD 28 bn

ITER Fusion Laboratory, FranceCost: USD 25bn

Fukushima Disaster Clean-up, JapanCost: USD 200 bn

Red Sea-Dead Sea Transfer, Jordan/IsraelCost: USD 10 bn

South-North Water Transfer, ChinaCost: USD 62 bn


USA:ASCE estimates $4,590 bn needed for US infrastructure over next decade

O’Hare Airport Modernization, ChicagoCost: USD 9 bn

Hudson Yard Development, New YorkCost: USD 20 bn

Seattle Sound Transit 3Cost: USD 54 bn

Texas Bullet TrainCost: USD 12 bn

California High Speed Rail ProjectCost: USD 77 bn

Mexico Border Wall ??Cost: USD 5 to 25 bn


Global Construction Outlook

• Construction will be influenced by convergence of technologies:

- Transport and energy: power systems designed for electric vehicles and V2G technologies;

- Water and energy nexus: multipurpose projects for water security, energy generation, flood alleviation and transport;

- Urbanisation, transport, communication and energy: smart cities designed around transportation hubs;

- Industrialisation and transport: Robotic factories using 3-D printing located for material imports and distribution of goods.

• Our forecasts for construction indicate a rise from $11.5 bn to $27.4 bn, or 15.5% of world GDP by 2033.

Graham Robinson – Global Construction Perspectives

Global Construction 2030 is the fourth in a series ofglobal studies of the construction and engineering industry

published byGlobal Construction Perspectives

and Oxford Economics

[email protected]

2018 Global Top 10 Construction MarketsUS$ at 2017 prices and exchange rates

Source: Global Construction Perspectives and

Oxford Economics

www.globalconstruction2030.com

© Global Construction Perspectives and Oxford Economics

China21.9%

US14.2% Japan

5.7%

India4.3%

UK3.4%

Germany3.3%

Australia3.0%

France2.9%

Indonesia2.9%

Canada2.6%

Other35.8%

2030 Global Top 10 Construction MarketsUS$ at 2017 prices and exchange rates

Source: Global Construction Perspectives and

Oxford Economics



China24.4%

US12.8%

India7.0%

Indonesia4.1%

Japan4.1%

UK2.7%

Germany2.7%

France2.4%

Australia2.4%

Canada2.2%

Other35.2%

Increasing Importance of Emerging MarketsUS$ at 2017 prices and exchange rates

Source: Global Construction Perspectives and Oxford Economics



68%

48% 46% 43% 40%

32%

52% 54% 57% 60%

0%

20%

40%

60%

80%

100%

2005 2018 2020 2025 2030

Developed Markets Emerging Markets

Regional Summary 2018-2030Average annual % change

Source: Global Construction Perspectives and Oxford Economics



1.4

2.2

1.0

2.52.7

4.7

3.6

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1.0

2.0

3.0

4.0

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Western Europe

Latin AmericaEastern Europe

Asia Pacific (Developed)

North America

Sub-Saharan Africa

Middle East North Africa

Asia Pacific (Emerging)

Ann BentleyGlobal Board Director

Member of Construction Leadership Council

Q&A

Email: [email protected]

World Economic League Table 2019 - CIOB Academy · 2019. 3. 15. · Link, Malaysia Cost: USD 20 bn...

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