U.S. Tops Infrastructure Wealth Index

New index estimates prosperity based on infrastructure, built environment investment

The U.S. was the wealthiest nation in terms of built assets in 2012, with total wealth estimated at $39.7 trillion, according to the first Global Built Asset Wealth Index, published Tuesday.

ARCADIS, a global engineering and consultancy firm, and its subsidiary EC Harris, a global built asset consultancy, conducted the study to provide insight into the current and future prosperity of nations around the world based on analysis of investment in infrastructure and the built environment.

The index compares the U.S. with the 30 countries that collectively represent 82% of global GDP. It shows that total built asset wealth within these countries stands at $193 trillion, the equivalent of nearly three times the $68 trillion GDP of the same countries.

Researchers defined “built assets” as including all the tangible fixed capital investment counted in the national accounting framework used by national statistical offices: infrastructure investment, residential and non-residential construction, investments in plant and machinery and improvements in natural assets such as land reclamation. Following are the top 10 nations on the index:

 

 

Country Built

 

Asset Wealth ($ trillion)

1. U.S.

 

$39.7

2. China

 

$35.4

3. Japan

 

$18.3

4. India

 

$11.8

5. Germany

 

$10.4

6. France

 

$7.8

7. Italy

 

$7.4

8. South Korea

 

$6.0

9. Russia

 

$5.9

10. Spain

 

$5.9

The index forecasts U.S. total wealth to grow to $47.2 trillion by 2022, a 19% increase. 

China is coming on fast, and could surpass the U.S. in built asset wealth as early as 2014. By 2022, it is projected to have accumulated $75.7 trillion in built assets.

The study found that growth in built asset investment in the U.S. would average around 6.5% over the coming decade. However, two factors will contribute to China’s overtaking the American economy in built asset terms.

China still surpasses the U.S. in GDP growth, even as its economic growth slows. At the same time, with built asset investment at nearly half of GDP in 2012, China invests more in its built assets as a share of GDP than the U.S.

Sustaining this level of investment will allow China to exceed the built asset accumulation in the U.S. in the coming years, according to the study.

Elsewhere, Asian and Middle Eastern countries are taking advantage of large cash reserves to invest in their built environment at what the study said was “an unprecedented rate.”

In contrast, growth in European countries with an aging built environment and less cash is expected to be much more subdued at around 2.7%. Indeed, investment may fall short of asset depreciation in some struggling Eurozone economies, leading to a drop in the built asset stock.

“Indicators like GDP and unemployment, which are traditionally used to define a country’s performance, only tell one side of the story,” Matt Bennion, global director of buildings at ARCADIS, said in a statement.

“While GDP quantifies national income, this analysis of the total stock of built assets provides an indication of accumulated wealth and the resources which can be drawn upon to fuel future economic growth. Those nations that make the most from investing, developing, operating and reinventing their built environments are the best placed to succeed in the changing world economy.”

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