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British infrastructure returns shrink 3.3%

Money

Building and infrastructure contributions to the UK economy are down 3.3% compared with 2014 figures, according to a report by consultant Arcadis.

Although returns from British built assets increased in real terms from £565bn in 2014 to £571bn in 2016, strong GDP and slow asset growth contributed to the UK’s lower ranking in the Global Built Asset Performance Index.

Arcadis reported that the UK’s hesitancy in investing in major infrastructure projects resulted in lower GDP growth.

Britain ranked 11th in the report, which compares 36 countries representing 78% of global GDP. The UK came lower than European neighbours Germany and France, whose overall built asset income was valued at £790bn and £630bn respectively.

“The UK is seeing a slowdown in the contribution that built assets make to GDP, particularly as the economy has become more diversified into services and people oriented industries, and our infrastructure starts to age,” said Arcadis UK head of business advisory Greg Bradley.

“It is clear we have an economic imperative to accelerate the delivery of major new programmes such as nuclear new build, High Speed 2, and Crossrail 2, whilst sustaining the delivery of investment in our existing transportation and utility assets.

“The level of this investment, including increased investment by cities and local authorities, suggests that the UK market could expect to see some pick-up in the performance of its built asset stock over the coming years.”

On a global scale the report revealed that building and infrastructure has become more productive, with built assets contributing £28.6tn to global GDP in 2016, making up 39.6% of GDP compared to 38.7% in 2014.

In 2016 China generated the highest economic returns from built assets at £8.3tn, followed by the US at £4.3tn and India at £2.9tn.

The index was developed in partnership with the Centre for Economics and Business Research, and examines income generated by fixed assets such as airports, schools, roads and power plants.

Readers' comments (1)

  • Greg Bradley is wrong in our opinion on the new nukes being built; they will be white elephants by the time they are built; much better to go for barrages that can double as flood defenses.
    At least they might better preserve infrastructure.
    Nuke, being unethical, only provide a financial noose for 250,000 years. Not the way to go. Not value for money, not the right kind of infrastructure the UK needs.

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