Davy Private Clients Insights


Investment Themes November 2016

Global Infrastructure

david-hillery-author.jpg David Hillery
Senior Investment Strategist

After the financial crisis governments worldwide cut back on spending to shore up their finances. But eight years on, they are starting to realise that they need to invest in their ageing infrastructure. According to the consultancy firm McKinsey, $57 trillion worth of infrastructure investment is needed globally over the next 15 years.

Some of the projects already underway are incredibly ambitious and require massive investment. These include China’s multi trillion “One Belt, One Road” initiative and in Europe the €315 billion “Juncker Plan”. While in America the Senate recently passed the $305 billion US highway bill, and Trump has stated he will target infrastructure spending.

These projects are likely to be financed through a combination of public and private partnerships. The companies that stand to benefit the most will have the capabilities to build everything from roads, bridges, airports, ports, schools and hospitals.

Figure 1: G3 potential investment (in billions of USD)

Source: Bloomberg