R/€ = 14.21
R/$ = 11.26
Au 1214.64 $/oz
Pt 1283.00 $/oz
Jan 18, 2008
Emerging markets' infrastructure spend to leap to $21,7tn over next decade - studyBack
MEXICO CITY|New York|Tokyo|Africa|Flow|Morgan Stanley|Ports|PROJECT|Resources|Water|Africa|Asia|Latin America|Brazil|China|India|Russia|South Africa|United Arab Emirates|USD|Building|Flow|Product|Services|Transport|United Nations|Infrastructure|Power|Rail|Water|New York|Eastern Europe|Middle East
© Reuse this A report by Morgan Stanley Research has forecast an emerging markets' (EMs) infrastructure spend of $21,7-trillion over the next decade, with Asia responsible for 67% of this staggering figure.
Across the EMs of Africa, Asia, Eastern Europe, Latin America and the Middle East, a boom in infrastructure building was under way across all sectors including power, rail, water, property, ports and airports.
Both government and the private sector were "deploying unprecedented amounts of capital to upgrade the emerging world" and at the forefront of this cash injection were India and China, Morgan Stanley said in its report.
It stated that the two countries would dominate the spending, with China accounting for 43% (some $8,9-trillion) and India 13% (about $2,7-trillion) of the total forecast EM infrastructure spending for the next ten years, from 2008 to 2017, respectively.
Russia comprised 10% (about $2-trillion) of the total spend, Brazil 5% (about $1-trillion) the Middle East represented 4% of which the United Arab Emirates was expected to spend $210-billion and Saudi Arabia $489-billion, and South Africa accounted for 1% of the spend which equated to $293-billion.
Morgan Stanley explained that demand for infrastructure was increasingly driven by urbanisation, the move to the market economy and demand from the developed world for EM exports and additional capacity for their transportation.
The report indicated that the overwhelming majority of urban population growth in recent years had been in the emerging world.
In 1975, the United Nations estimated that only three cities had a population of more than ten-million people: Tokyo, New York and Mexico City. By 2005, this figure had risen to 20 and, by 2015, the organisation projected the total would be 22. Of these, 18 would be in the emerging world and only four in the developed world.
Morgan Stanley said that this notable growth in urban populations in the emerging world translated into continued and ever-increasing demand for basic infrastructure, basic services and transport.
And the EM countries stand in good stead to meet this demand, according to the report. It said that robust gross domestic product growth and supportive balance of payments positions had provided the funding to build infrastructure in most EM countries - taking into consideration varying delivery capabilities.
"Private funding, in conventional project finance form, as well as innovative dedicated infrastructure funds are heavily engaged. A surge in market listings of owners, operators and contractors to build EM infrastructure assets is also under way," Morgan Stanley stated.
It estimated that the number of listed EM infrastructure-related entities had risen from 87 to 152, which reflected a 75% increase, over the last five years, with a total market capitalisation rising from $87-billion to $502-billion.
"As this universe of investable EM assets continues to expand, we expect substantial private capital to flow to the sector. If we add resources from global and local development banks and other multilateral institutions to the mix, there is, in our view, a powerful combination of government, multilateral and private sector money coming together to fund this massive infrastructure transformation," Morgan Stanley declared.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Construction News
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The latest TransUnion Vehicle Pricing Index (VPI) contains a number of small, but significant indications that the tide may at last be turning for the beleaguered used car industry. For the third successive quarter, used car inflation has increased on a year-on-year...
The South African new vehicle market is likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. Van Zyl is also president of the National Association of...
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu. Despite allegations of irregular tendering process, the...
Using crafty wordplay on a well-known Internet meme, brilliant South African-born US entrepreneur and businessperson Elon Musk announced that Tesla Motors would not initiate patent lawsuits against anyone who, in good faith, wanted to use its technology. Instead,...
August new vehicle sales declined by 1.4%, to 55 722 units, compared with the same month last year. Assisted by the car rental market, the South African new passenger car market, at 37 953 units, contracted by 1 047 units, or 2.7%, compared with August last year.