Capital project & infrastructure spending trends vary around the world due to specific conditions and issues that different regions face. Here you can explore current & projected spending activities in various parts of world and the driving factors behind them. Access country-focused reports from our download page.
This is the largest and most diverse region in our analysis with economies at varying levels of development in both advanced and emerging economies in the Asia-Pacific region. China accounts for roughly half of the Asia-Pacific infrastructure market and, with the exception of Japan, public finances for most of the Asia-Pacific region remain relatively supportive of infrastructure spending -- even though the weaknesses in the global economy have meant government deficits at present. Overall, the Asia-Pacific capital project and infrastructure market will grow by 7% to 8% a year over the next decade, approaching $5.3 trillion by 2025 and representing nearly 60% of the world total.
Overall, capital project and infrastructure spending in the region is expected to increase about 5% a year and reach about $508 billion by 2025, driven mainly by growth in extraction. But its share of global spending will fall from about 7% to 6%. With the exception of Ukraine, government finances in the former Soviet Union are in much better shape for infrastructure spending than in the countries in Central and Eastern Europe. Russia’s infrastructure spending is expected to reach nearly $300 billion by 2025, which is almost 10 times the amount in 2003 and about double the level in 2011. Despite rapid growth in spending in recent years, Russia’s infrastructure is still well below par by international standards.
Latin America’s capital project and infrastructure spending is expected to increase steadily over the next decade, reaching about $557 billion per year by 2025. While the region’s share of global spending will likely decline, Brazil, along with Chile and Colombia, is likely to increase its share of overall regional spending. The other countries covered in the analysis include Argentina, Peru, and Mexico. Altogether, the six nations account for nearly 90% of the region’s GDP.
Capital project and infrastructure spending in the Middle East is expected to more than double from $207billion in 2011 to $510 billion in 2025, growing at a pace generally in line with the global market and retaining about a 5% share of it. The extraction sector is, of course, dominant in the oil-rich Middle East, accounting for 32% of infrastructure spending in 2013, and it’s projected to increase to an estimated 35% by 2025. Countries in this region also will likely make improving power and water supplies a priority to meet increased demand.
The US is currently the world’s second largest capital project and infrastructure market, overtaken in 2009 by China. Overall, North America’s infrastructure market is expected to grow to $1.2 trillion per year by 2025. While the global economic crisis hurt the US more than Canada, both the US and Canada will fare better than Western Europe in the heavy industrial sector, with US spending expected to top $100 billion and Canada’s to reach $16 billion by 2023. North America will be able to compete better than Europe against developing economies in the manufacturing sector because of lower energy prices and geographical advantages over lower-cost competitors that are far afield and face rising costs to transport their goods.
Growth prospects in most of the region’s economies look bright. That’s because they weren’t affected as much by the global economic crisis as other regions and because the policy environment for growth has been improving across the continent. Overall, Nigeria and South Africa dominate the capital project and infrastructure market in the region. Nigeria’s share is expected to grow substantially over the next decade because of better government finances and the fastest rate of urbanisation on the continent. In general, infrastructure spending in Sub-Saharan Africa will grow on average 10% a year over the next decade, exceeding $180 billion by 2025.
The global and European financial crises are expected to weigh heavily upon capital project and infrastructure spending in Western Europe. Debt burdens have risen substantially in the UK, Spain, France, and the Netherlands. Only in Germany and Sweden is public debt still reasonably well contained. Because of austerity and its slow economic recovery, Western Europe will face several more years of declining infrastructure spending, followed by a very gradual rebound.