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China Spends More On Infrastructure Annually Than N. America, W. Europe, & Africa Combined

'A dollar of infrastructure investment can raise GDP by 20 cents by boosting productivity'- McKinsey Global Institute

June 17, 2016

A new study, Bridging Global Infrastructure Gaps by the McKinsey Global Institute, says that despite the obvious need to adequately fund their infrastructures for current repairs and future builds, investment has instead fallen in10 major economies - include the U.S. - since the Great Recession.

Meanwhile, China is going great guns and building roads, bridges, sewers, ports, power - all the things that make a country run.

The MGI report measured infrastructure spending of 10 countries/economies as a share of the gross domestic product from 2008 to 2013 and found China spends 8.6 percent of its GDP, greater than the United States, Canada, Western Europe and Africa combined. In fact, Africa invests more in its infrastructure than the U.S.

The MGI report says to keep pace with projected world growth, countries will have to spend $3.3 trillion collectively every year for the next 15 years.

But we aren't doing it.  If the current rate of underinvestment continues, the world will fall short by at least $350 billion a year, creating an investment gap that will be almost impossible to close.

Bridging Global Infrastructure Gaps also evaluates the quality of infrastructure projects that have been built around the world. The U.S. shares the Low Quality, Low Spending quadrant with Zimbabwe and Brazil.

Disappointing.

This election season will bring speeches and promises about how the winning presidential candidate will improve our infrastructure.  Download the MGI report here for a good summary of what they - and we - have to work with.

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