A wave of government bailouts around the world and a sharp deterioration in existing infrastructure could lead to as much as $35 trillion in public works spending over the next 20 years, according to a new study by CIBC World Markets.
The study, released last week, says that many of the countries that balanced their budgets over the past 10 years did so by skimping on the construction costs for new public assets and the maintenance of existing buildings and roads, CBC reported.
"The global economy is running a major infrastructure deficit as the cost of decades of under-investment is now surfacing," said Benjamin Tal, the analyst who authored the study.Canada, for example, has eliminated an enormous budget deficit left over from the 1980s, but built up an infrastructure deficit of $120 billion in the process.
Governments have come to realize that they are better off spending a modest amount each year on infrastructure upkeep, rather than spending substantially more in one lump sum to replace outdated projects, Tal said.
According to the CIBC forecasts:
- North America will spend $180 billion on infrastructure each year.
- Europe will spend $205 billion.
- Asia will spend $400 billion.
- And $10 billion will be invested in Africa annually.
Stimulus plans will figure heavily into the global infrastructure boom…
Asia Leans on Infrastructure
China, Japan, Malaysia, and Singapore have all unveiled stimulus packages that focus on shifting their respective economies away from dependence on foreign exports and creating jobs at home, mainly through public works projects....MORE
Friday, February 6, 2009
Global Infrastructure Spending to Reach $35 Trillion Over the Next 20 Years
From Money Morning (Australia):