The UK has fallen two places down the global ranking for infrastructure asset investment and now sits in 13th position behind all other G7 nations, according to the latest Global Built Asset Wealth Index published by leading global design and consultancy firm for natural and built assets Arcadis.
China has become the world’s richest country measured by the value of its built environment according to the index, which was compiled for Arcadis by the Centre for Economics and Business Research (Cebr). The index calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87% of global GDP.
Total built asset wealth now stands at an estimated US$218 trillion, which is the equivalent to US$30,700 per person alive today. China now has a built asset wealth of US$47.6trillion, overtaking the USA which comes in second place with a wealth of US$36.8trillion.
China’s heavily investment-dependent growth model means that by 2025 its built asset stock will be worth over double that of the US, and will exceed in size those of the next four economies combined.
The stock of built assets is closely correlated with a nation’s economic output. On average, countries analyzed have a built asset stock worth 2.9 times GDP.
The UK scores poorly for per capita built asset wealth (US$76,000 per person), falling behind all other G7 countries. However, the report says around £300 billion of further investment is already planned over the next 5-10 years.
China's built asset investment exceeds all other economies combined
Since 2000 China has invested US$33 trillion in its built assets, a total that exceeds all other economies combined. The growth is evidence of China’s unprecedented level of investment in its infrastructure – 9% of GDP – which outpaces global competitors like the USA, which currently invests just 2%.
This year’s research also sees Qatar become a global leader, toppling Singapore as the most asset rich country per capita, with built assets of US$198,000 for every citizen. Qatar’s total built asset stock has grown 677% since 2000, while its construction industry is already growing at 18% per year, and is expected to invest a further US$150 billion over the next decade.
Julien Cayet, Global Leader of Business Advisory at Arcadis commented:
“The health and wealth of a nation can be measured in many different ways and while factors such as GDP or employment have great value, a prosperous society is underpinned by a well-developed built environment that meets the needs of its people and economy.”
“Developed economies have experienced a long-term stagnation and decline of their built asset stock, as aging infrastructure falls into disrepair and investment fails to keep up. This revelation comes at the very time they may need to tighten the fiscal belts and do more with less. It is critical that each investment they make – be it new buildings and infrastructure, or upgrade and repair – considers the whole lifecycle of these assets to deliver the built environment that their society needs.”
Shifting of wealth to emerging economies
The Global Built Asset Wealth Index shows a dramatic shift of wealth to emerging economies, with the traditional economic superpowers – the G7 – showing a net decline in the value of their built assets since the 2013 report. Structural assets depreciate at a rate of around 5% per year, meaning that this level of investment is the minimum required to maintain the status quo, a figure that equates to US$1.4trillion in the US.
In Europe, the almost decade-long economic slowdown has also had the negative effect of holding back investment. Meanwhile, economies including Indonesia, Thailand and the Philippines were amongst the biggest gainers.
The per capita leaders are all Asian economic centres, with Singapore (US$191,500 per person) Hong Kong (US$160,000), Japan (US$143,500) and UAE (US$140,500) making up the top five behind Qatar.
When China’s vast built asset wealth is split across its 1.4 billion people, its per capita ranking, at just US$34,000 per person, falls to 24th in the world, behind Chile (US$48,000), Mexico (US$47,500) and Thailand (US$44,500).
The research, conducted by the Centre for Economics and Business Research and based on over 20 independent global sources, calculates the value of the buildings and infrastructure in 32 countries, which collectively make up 87% of global GDP. Built asset wealth was broken down into construction (including infrastructure) and machinery and equipment and forecasts were made of stock increases and depreciation.
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