By Etuka Sunday with agency report.
PwC, in its new report, said its global capital project and infrastructure spending is expected to grow to more than $9 trillion annually by 2025, up from $4 trillion in 2012.
The report, for which Oxfords Economics provided research support, analyses infrastructure spending across 49 of the world’s largest economies which account for 90 percent of global economic output.
It covers five industry sectors – extraction, utilities, manufacturing, transport and social – and forecasts their impact on seven major world economic regions ((Western Europe, Latin America, Asia-Pacific, Middle East, sub-Saharan Africa, Former Soviet Union and Central and Eastern Europe).
It estimates the scale of current infrastructure investment and assesses the prospects for future investment from now to 2025. Overall, close to $78 trillion is expected to be spent globally between now and 2025 on capital projects and infrastructure.
The report finds that during 2011-12, the global infrastructure market rebounded from the global financial crisis, and will continue to grow between 6-7% yearly to 2025. The report shows that that the recovery will be geographically
uneven, led mainly by Asia, as spending overall shifts from West to East. The Asia-Pacific market will represent nearly 60 percent of all global infrastructure spending by 2025, driven mainly by China’s growth. Western Europe’s share will shrink to less than 10 percent from twice as much just a few years ago.
Long-term underlying trends in demographics, technology, natural resources, urbanisation and shifting economic power will continue to have an enormous effect on which areas of spending will grow. These paradigm shifts, together with a return to global growth are projected to drive significant spend for infrastructure worldwide for decades to come.
According to the PwC Head of Capital Projects and Infrastructure for Africa, Jonathan Cawood, “Emerging markets, especially China and other countries in Asia, without the burden of recovering from a financial crisis, will see much faster growth in infrastructure spending. The pace of urbanisation is also on the increase, with the biggest shift in urbanised populations likely in China, India, Ghana, Nigeria, and the Philippines. Urbanisation drives the demand for water, power, transportation and technology infrastructure.
Overall infrastructure spending in the sub-Saharan region is projected to grow by 10% a year over the next decade – exceeding $180 billion by 2025 – while maintaining its 2% share of the global infrastructure market.
Nigeria and South Africa dominate the infrastructure market, but other countries like Ethiopia, Ghana, Kenya, Mozambique, and Tanzania are also poised for growth. Growth prospects in most of the region’s economies look promising as they were not affected as much by the global financial crisis of 2008.