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COVID-19 shakes infrastructure investment outlook: Survey

Angela Gismondi
COVID-19 shakes infrastructure investment outlook: Survey

A new survey finds global private and public sector leaders are not confident about an increase in infrastructure spending following the worldwide spread of COVID-19 and are pessimistic about a post-virus economic recovery.

“The data shows that the outbreak of COVID-19 cases worldwide has essentially put a halt to infrastructure investment globally, putting the likelihood of essential projects such as the development of new hospitals, schools and irrigation systems into doubt,” explained Norman Anderson, chairman and CEO of CG/LA Infrastructure, a company which focuses on infrastructure project development globally and conducted the survey. “There is a need for a robust infrastructure commitment as part of any serious economic recovery.”

The Global Infrastructure Industry Survey was conducted from March 19 to 30 and received over 13,000 responses from various sectors including engineering/construction, finance, public owners of infrastructure and technology fields from over 30 countries.

“Now is the time for leadership, an investment model that will allow local economies to recover, and real attention to the benefits that infrastructure brings to people — not just jobs, but health, and a sense of confidence in the future,” said Anderson.

“What I am trying to do is use our platform so that people around the world have a voice in terms of what they need in infrastructure investment.”

The survey found only five per cent believe that investment will “increase significantly” following the pandemic, a sharp decline from 34 per cent before the crisis. Twenty-seven per cent of respondents said that the infrastructure investment would increase or increase significantly — a drop from 71 per cent, when asked previously.

According to the survey, prior to the crisis only 10 per cent of respondents thought that infrastructure investment would decrease (seven per cent), or decrease significantly (three per cent), but now a majority (52 per cent) believe that infrastructure investment will decline (34 per cent) or decline significantly (18 per cent).

The survey asked a variety of questions including how did you see infrastructure investment in your country before COVID-19 and how do you see it today?

“The whole message here is that people in countries around the world see this as being a big problem and from my point of view, I really want to bring this to peoples’ attention so that people can figure out how to do something about it right now,” said Anderson. “These are real issues and we want to get people to pay attention to them.”

Another question asked from a global recovery point of view is how do you see the infrastructure brand in your country? The study found 82 per cent of respondents see infrastructure as a weak or average brand, with the majority saying it is problematic or “characterized by incompetence and, especially, chronic corruption.”

“Because one of the big problems globally — it’s even a big problem in the U.S. and Canada but a bigger problem in emerging markets — is when you mention infrastructure people think corruption,” Anderson explained.

“If you are trying to look at a recovery, part of the recovery is going to come from infrastructure investment, you are throwing money down a hole if you are working with a very weak brand.”

There is an urgent need to address emerging markets infrastructure due to the lack of public trust in the infrastructure brand, he added. A question that focused on which infrastructure areas require the most investment found 28 per cent selected social infrastructure such as hospitals and schools was a top priority. Clean water was highlighted as the top priority by 14 per cent as were transit and highways (12 per cent) and wastewater (11 per cent).

“This is all stuff that doesn’t have any financial return…but it’s absolutely critical for countries and it’s critical for the brand of infrastructure because that means you would be focusing on the right stuff,” Anderson pointed out.

 

Follow the author on Twitter @DCN_Angela.

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