Global infrastructure trade is set to triple by 2030, by which time it should make up about 54 percent of the world’s merchandise trade, according to a recent report by global bank HSBC. Much of that growth is expected to come from emerging Asia’s investment in its infrastructure.
With developed economies still showing stagnated economic growth, European countries are expected to expand their exports of infrastructure-related goods at rates of between 4 percent and 5 percent a year through to 2030, with the US faring slightly better with an average 6 percent growth, according to the report.
At the same time, Asia is forecast to see the most rapid growth in merchandise trade in the decade to 2030, with countries like India, China and Vietnam seeing trade grow at an average of more than 10 percent a year. Asian countries are expected to become more prominent exporters and importers of infrastructure equipment, with China alone expected to take up a 34 percent share of global exports of infrastructure materials by 2030.
India is also expected to overtake the US as the world’s lead importer of goods for infrastructure as the country seeks to bolster its local networks. China, Hong Kong and Korea are also expected to be among the top five importers, while smaller and rapidly growing countries like Malaysia and Vietnam are climbing the rankings.
James Cameron, HSBC's head of project finance for Asia Pacific, explained that Asia’s strong need for infrastructure is the primary driver for global growth in the industry. Most Asian countries are now in the most capital-intensive phase of growth, as they need to build up the foundations of future economic growth. With the need for greenfield development increasing, Cameron sees a growing need for private sector involvement.
“Investment in Asia will be greater because the need is greater,” he told Infrastructure Investor. “The lack of infrastructure investment will be a bottleneck to growth in Asia if it’s not addressed.”