April 2016
Impact of Slowing World
Growth on the Infrastructure
Market
GLOBAL INFRASTRUCTURE HUB 2April 2016
GDP growth forecast revisions by IMF
Quarterly update Revision to 2 year forecast
2016 Q1 0.10%
2015 Q4 0.20%
2015 Q3 0.10%
2015 Q2 0.05%
2015 Q1 No change
2014 Q4 0.15%
2014 Q3 0.05%
2014 Q2 0.05%
Source: IMF, GI Hub’s analysis
GLOBAL INFRASTRUCTURE HUB 3April 2016
Average inflation rate of 10 largest economies*
Source: The World Bank, The Hub’s analysis
* Countries are the United States, United Kingdom, Russia, Japan, Italy, India, Germany, France, China and Brazil
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3.8%
2.6%
GLOBAL INFRASTRUCTURE HUB 4April 2016
Public capital stock growth vs GDP growth
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Per
ce
nt
Western Europe
Source: International Monetary Fund, The World Bank, The Hub’s analysis
* Western Europe is defined as the United Kingdom Germany, France and the Netherlands
10 year moving average of
change in GDP
10 year moving average of
change in public capital stock
GLOBAL INFRASTRUCTURE HUB 5April 2016
Cumulative increase in economic output from investing
1 per cent of GDP in public investment
0.4%
1.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Year 0 Year 4
Per
ce
nt
Source: International Monetary Fund, The Hub’s analysis
“…public investment
shocks have statistically
significant and long-
lasting effects on
[economic] output.”
GLOBAL INFRASTRUCTURE HUB 6April 2016
Ciudad Real Central Airport
• 1.1b Euro cost
• 10m passengers p.a capacity
o Only attracted a few ‘000
• Closed after 3 years of
operation
• Was in receivership, sold in
September 2015 for 28m Euro
GLOBAL INFRASTRUCTURE HUB 7April 2016
Cumulative increase in economic output from investing
1 per cent of GDP in public investment
Source: International Monetary Fund, GI Hub analysis
0.4%
1.5%0.4%
1.1%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Year 0 Year 4
Per
ce
nt
2.6%
0.8%
GLOBAL INFRASTRUCTURE HUB 8April 2016
$US 57 trillion needed by 2030
Source: McKinsey & Company, GI Hub analysis
GLOBAL INFRASTRUCTURE HUB 9April 2016
Large supply of private investment capital, however
only 1.6%* invested in infrastructure
2232
4152
66
83
106
0
40
80
120
2000 2005 2010 2015 2020 2025 2030
6% p.a
5% p.a
Global pension, life insurance, and SWF assets under management ($US trillions)
* OECD 2014
GLOBAL INFRASTRUCTURE HUB 10April 2016
Pennsylvania Rapid Bridge Replacement Project
GLOBAL INFRASTRUCTURE HUB 11April 2016
Australia is adding 4 million more people every decade
2016 2061
24m42m
Source: Australian Bureau of Statistics
GLOBAL INFRASTRUCTURE HUB 12April 2016
“We work to facilitate a better supply of quality, bankable
government infrastructure projects to the private sector.”
What is GI Hub doing?
GLOBAL INFRASTRUCTURE HUB 13April 2016
Thank you, and to our partners and funders