UK lagging on infrastructure investment global survey finds

19 Jul 13
The UK’s poor quality infrastructure is likely to constrain the growth prospects of the economy compared to international rivals, a report analysing the state of the built environment across 30 developed countries has warned.

By Richard Johnstone | 22 July 2013

The UK’s poor quality infrastructure is likely to constrain the growth prospects of the economy compared to international rivals, a report analysing the state of the built environment across 30 developed countries has warned.

The Global Built Asset Wealth Index, published for the first time today by consultancy EC Harris, found that the UK has economically productive property and infrastructure worth £3.6 trillion. This places the country 11th in the list of developed nations, which is headed by the US, with assets worth £26trn, and China, where there is £23.5trn worth. These are the only countries with economic infrastructure worth more than £20trn, with Japan in third place on the list at £12.1trn.

The report defines built assets as all tangible fixed capital investment regarded as assets in national accounts. As well as roads, railway and airport infrastructure provided by the public and private sector, this also includes investment in both homes and business premises and investments in machinery.

The report predicted the UK’s low built-asset wealth – which on a per-person basis is lower than in France, Germany, Italy and Spain – would restrict future growth. Overall, the UK’s infrastructure worth per head is nearly 30% below the average value of other developed economies.

This is the result of the country having ‘significantly underinvested’ in infrastructure over many years, EC Harris’ head of strategic research and insight Simon Rawlinson said.

‘Indicators like gross domestic product and unemployment, which are traditionally used to define a country’s performance, only tell one side of the story. While GDP quantifies national income, our analysis of the total stock of built assets provides an indication of accumulated wealth and the resources, which can be drawn upon to fuel future economic growth. The UK’s relative low position in the global rankings raises questions, therefore, about how well placed it is to deliver growth.

‘The UK needs to continue to invest in new and existing built assets to improve mobility, productivity and standard of living, but does not have the available finance to do so.’

The full list of countries and total economic asset worth is:

1.            US                             £26trn

2.            China                        £23.5trn

3.            Japan                        £12.1trn

4.            India                          £7.83tn

5.            Germany                   £6.9trn

6.            France                       £5.2trn

7.            Italy                           £4.9trn

8.            South Korea              £4trn

9.            Russia                       £3.9trn

10.           Spain                        £3.9trn

11.           UK                            £3.6trn

 

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