The leading countries when it comes to gaining returns from built assets are China followed by the US, India, and Japan, according to research.
China’s economic growth is highly influenced by its built assets, which accounted for 52.9% of GDP this year, but they are expected to peak as the economy gradually rebalances towards services and consumption, as opposed to manufacturing and investment.
The US, with a total return of $5.4tn in 2016, is experiencing a decline in the effectiveness of existing assets. India had returns of $3.6tn and Japan $1.9tn, while China had $10.4tn.
The Arcadis 2016 Global Built Asset Performance Index, developed in conjunction with the Centre for Economics and Business Research (Cebr), examines the income generated by buildings, infrastructure and other fixed assets such as homes, schools, roads, airports, power plants, malls, railways, ports across 36 countries.
Julien Cayet, global business advisory leader at Arcadis, said “We can clearly see that many emerging nations are generating healthy returns from their new infrastructure, while developed nations are seeing a slowdown in its contribution as their economies diversify to service industries and their infrastructure ages.
“Both need to better understand how built assets can power more growth to their economies, especially in a world where funding challenges exist and the need for built assets that will stand the test of time are paramount.”
Cayet said asset productivity is going to be a critical driver of economic growth as labour productivity, investment and population growth slows over the next decade.
When it comes to measuring return on built assets per capita Qatar leads with an average of $66,300. It is followed by the UAE at $37,900, Singapore at $35,900, and Hong Kong at $21,400. The leading large economy in per capita terms is the US at an average of $16,800 per person.
In China the share of GDP accounted for by built assets increased from 39% in 1990 to 52.9% this year and the country is expected to continue investing in built assets at an unprecedented level.
However, Southeast Asian countries such as Malaysia, Vietnam and Indonesia will see the greatest percentage increase in built assets over the next decade as they continue to invest in manufacturing.
Indonesia’s returns from built assets are forecast to rise from $1.1tn in 2016 to $2.1tn in 2026 and Malaysia’s returns will nearly double in the next ten years to $520bn.
Germany leads in Europe, gaining $1tn returns from its built assets, followed by Turkey at $807bn and France at $794bn. However, other European countries do not generate particularly high returns on a per capita basis compared to their stocks of assets. In the UK returns even fell due to low rates of public and private investment from 27.2% to 26.3%, a total of $719bn.
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