Arcadis report finds lack of investment in new and replacement buildings and infrastructure could threaten UK鈥檚 economic recovery

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A lack of investment in new and replacement buildings and infrastructure could threaten the UK鈥檚 economic recovery, consultant Arcadis has warned in its annual Global Asset Performance Index report.

Just 28% of the UK鈥檚 GDP, or 拢412bn, was generated from built assets in 2013, compared to a global average of 40% and an average for advanced economies of 35%.

The firm said the UK recent efforts to 鈥渟weat its built assets to secure best value鈥 had helped make them 鈥渧ery efficient at generating GDP鈥, but it warned 鈥済reater investment鈥 was needed, particularly in the housing, education and social care sectors.

Arcadis forecasts the performance of the UK鈥檚 built assets will improve by just 18% over the next decade, below the average for advanced economies of 21%.

Arcadis warned: 鈥淭he UK government and private sector need to accelerate investment in buildings and infrastructure to reinforce future economic growth.鈥

The report examined the income generated by buildings, infrastructure and other fixed assets across 30 countries that collectively represent 82% of global GDP.

The 30 countries鈥 built assets generated 拢16.1tn of income in 2013, with China leading the pack at 拢4.1tn, followed by the USA at 拢3.3tn.

Mexico and Turkey generated the highest proportion of income from their built assets at over 60% of GDP due to their low labour costs and large industrial sectors.

Russia is the least reliant on built assets for generating GDP, with just 14% of economic output attributable to built assets, which Arcadis said 鈥渉ighlighting a need to invest in the quality of its infrastructure鈥.

The performance of China鈥檚 built assets is forecast to grow the fastest over the next decade, by 77%, followed by Saudi Arabia at 70% and Indonesia at 66%.

The performance of Europe鈥檚 built assets is not expected to improve greatly over the next decade due to low levels of replacement of its existing asset base, with Germany and France ranking poorly alongside the UK, while Italy is expected to improve the least well of all 30 countries at 8%.

Commenting on the UK, Simon Rawlinson, Arcadis鈥 head of strategic research and insight, said: 鈥淲hilst it is good news that the UK extracts better than average economic returns from its built assets compared to other advanced economies, if it is to remain competitive on a global stage, it needs to both invest in new assets and further improve the performance of what it already has.

鈥淭he UK risks a future of enduring problems due to the quality of its ageing infrastructure which could result in weakened economic growth.鈥

Built asset global ranking

         Country                 Built Asset Income 2013 (拢) *

1.         China               4.1tn

2.         USA                3.3tn

3.         India                1.2tn

4.         Japan              1.1tn

5.         Germany          600bn

6.         Mexico            589bn

7.         France             487bn

8.         UK                   412bn

9.         Brazil               377bn

10.       Turkey             370bn