Investment in the built environment including key schemes such as HS2, Thames Tideway Tunnel and airport expansion remains key to boosting UK GDP growth, according to new report by Arcadis.
The UK has slipped two places down the global ranking for infrastructure asset investment and now sits in 13th position behind all other G7 nations apart from Canada.
The annual global ranking by Aradis also shows that China has now overtaken the US to top the rankings with a built asset wealth of £30.8trn. In contrast the UK’s built environment is now worth a total of £3.1trn.
The Index demonstrates a strong link between infrastructure asset value and national GDP, highlighting the need for the UK to press forward with plans to invest in projects such as High Speed 2, Thames Tideway Tunnel and airport expansion as a means to unlock theUK’s economic growth potential.
The top ten nations :
1. China £30.8trn
2. USA £23.8trn
3. Japan £11.8trn
4. India £9.8trn
5. Germany £6.6trn
6. Russia £5.4trn
7. Italy £5.12trn
8. France £5.12trn
9. South Korea £3.9trn
10. Brazil £3.8trn
Selected others
13. UK £3.1trn
16. Australia £2.14trn
17. Saudi Arabia £2.0trn
20. Netherlands £1.4trn
22. Malaysia £1.1trn
24. Belgium £0.9trn
30. Chile £0.6trn
31. Qatar £0.3trn
“As a mature economy, the UK relies too heavily on its existing infrastructure,” said Greg Bradley, head of UK business advisory at Arcadis warning that the decline in the value of the UK’s built assets could have caused a knock-on effect to UK GDP.
“New projects in the UK have to integrate with the infrastructure that is already in place and help deliver better value from it,” he explained. “Investment is crucial if the UK to meet its wider infrastructural needs and deliver growth. The onus now is on the government to implement policy that will provide greater certainty on timing and sale for major programmes, allowing businesses to plan effectively and, vitally, creating the right environment for investors to fund them."
The Arcadis annual Global Built Asset Wealth Index is produced with the Centre for Economics and Business Research (CEBR) and calculates the value of the built environments of 32 leading countries across the globe which make up 87% of global GDP.
Total built asset wealth across the globe now stands at an estimated £141trn, which is the equivalent of just under £20,000 per person alive today.
Since 2000, China has invested £21.3trn in its built assets - an unprecedented 9% of GDP – compared to global competitors like the USA, which currently invests just 2%.
Qatar is ranked 31st but tops the Index as the richest built asset owners per capita, with a built environment now worth almost £130,000 per person and a construction industry which continues to grow at around 18% per year.
Malaysia is ranked 22nd and identified as a nation benefitting from significant public infrastructure investment, with the total road network growing by 68% in the past five years.
Similarly Saudi Arabia, ranked 17th – Saudi Arabia has recording a 200% growth rate in asset value since 2010 thanks to large scale investment in the country’s homes and schools.
The first Global Built Asset Wealth Index was published in 2013. For further information visit www.arcadis.com/builtassetindex