Study suggests coronavirus will cause decrease in infrastructure, water project spending

01-04-2020
budget,funding,infrastructure,water,projects,coronavirus,COVID-19

Despite the fact that social infrastructure and water projects, such as clean water and wastewater operations, are identified as top priorities from private and public sector entities from around the world, a new CG/LA Infrastructure survey shows that global industry leaders are not hopeful about an increase in infrastructure spending following the worldwide spread of the coronavirus.

In its “Global Infrastructure Industry Survey,” CG/LA Infrastructure found only 5% believe that investment will “increase significantly” following the pandemic, a sharp decline from 34% before the crisis. In total, only 27% believe that infrastructure investment would increase or increase significantly — a drop from 71% when asked previously.

Prior to the crisis, only 10% of respondents thought infrastructure investment would decrease (7%), or decrease significantly (3%), but now a majority (52%) believe that infrastructure investment will decline (34%) or decline significantly (18%).

“The data shows that the outbreak of COVID-19 cases worldwide has essentially put a halt to infrastructure investment globally,” said Norman Anderson, Chairman & CEO of CG/LA Infrastructure. “It’s clear that more has to be done — whether it is building more hospitals or schools, or other key projects delivering high quality benefits such as clean water and irrigation systems — particularly in developing countries. Given that infrastructure needs to be a driver of the global economic recovery, obviously these results are deeply troubling.”

A critical theme emerging from the survey is that 82% of respondents view infrastructure as a weak or average brand. Only 18% identified infrastructure as a strong brand – the vast majority saw it as problematic, or characterised by incompetence and, especially, chronic corruption.

Overall, given the lack of public trust in the infrastructure brand, there is an urgent need to address emerging markets infrastructure. Other findings include 28% selected social infrastructure (i.e. new hospitals and schools) as their top priority, with 55% listing it as one of their top three priorities. Clean water was highlighted as the top priority by 14% and was included in a top three priority by 48% of respondents. Transit and highways (12%) and wastewater (11%) were other top areas cited as in need of investment.

The Global Infrastructure Industry Survey was conducted from March 19 to 30 and sent to more than 13,000 global respondents in engineering/construction, finance, public sector, and technology fields. In a separate recent survey, 94% of U.S. infrastructure executives agreed that an infrastructure stimulus was critical for the US to emerge quickly from the current crisis. And 94% of respondents also believe that the US should increase private infrastructure investment.

The full list of countries that participated in the survey:

Afghanistan, Argentina, Bahamas, Brazil, Canada, Chile, China, Colombia, Costa Rica, Denmark, Dominican Republic, Egypt, El Salvador, France, Georgia, Germany, Guatemala, Indonesia, Iraq, Israel, Italy, Japan, Kuwait, Mexico, Nepal, The Netherlands, Norway, Oman, Paraguay, Peru, Saudi Arabia, Serbia, Singapore, Spain, New Zealand, UAE, Ukraine, United Kingdom, Uruguay.