After months of trade war rhetoric, investors at least seem to have largely stopped listening. Exemptions in the US-Mexico-Canada Agreement are protecting the bulk of cross-border trade, while markets have mostly calmed. Investors are looking for a route to commitments but the overall political picture is far from supportive.
2024 is proving to be a crucial year for North American infrastructure investing. Mexico has already voted in a new president, and the US is up next. Voters will soon be faced with a choice between former president Donald Trump and Democrat vice-president Kamala Harris. No doubt there is some concern over political risk, but North America remains the leading destination for infrastructure investors. Opportunities abound, as this year’s report showcases.
North America has, for many years, been a preeminent infrastructure investment destination. Interest in the region has now accelerated driven by the US, on account of President Joe Biden’s $1 trillion infrastructure plan.
Combine that with the world’s most dynamic energy market, the energy transition and digital infrastructure mega-trends – as well as an LP community with plenty of room to grow their allocations to the asset class – and North America is likely to feature prominently in our coverage for many years to come.
Given those factors, we are expanding our coverage of the region and offer our readers the opportunity on this page to explore key stories, news analysis, opinion and features.
The North American infrastructure market was going strong – not least in US offshore wind and Canadian renewables – even before the $370 billion Inflation Reduction Act came along. That legislation, which includes $260 billion of energy transition tax credits, has provided a significant further boost. However, there is more to the market than the energy transition, with transport – not least rail and shipping – telecommunications, data centres and more all also helping to keep investors busy.
Although there are opportunities beyond the US, the Infrastructure Investment and Jobs Act, finally passed by the Senate in August, promises a new dawn for the market, with $550 billion of new federal spending over five years. Roads, bridges, rail, public transport, airports, ports, power generation, water infrastructure and broadband are all among the big winners
The world has changed, and the question is how this crisis might be turned into an opportunity to reimagine infrastructure. North America has seen huge sums pouring into digital infrastructure and renewable energy in the last few months. This suggests that for every sector, such as transport, that has been pummelled by the pandemic, there are plenty of opportunities opening up elsewhere for infrastructure investors.
Private capital is doing its part to meet North America’s infrastructure needs. Despite the continued absence of the $200 billion in federal funds and the new infrastructure bill that President Donald Trump promised in his 2018 State of the Union address, investment continues in the US’s energy revolution, as well as in many successful PPP projects in Canada.
PPPs have proven more problematic in the US than they have in its northern neighbour, with major players such as SNC-Lavalin and Swedish construction firm Skanska both stepping back from the market after experiencing losses.
However, on the theme of major players, they don’t come much bigger than Blackstone, which has raised $14 billion for a North America-focused fund, bringing the promise of plenty more activity in the future.
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