New Economic Study Reveals Global Built Environment Wealth Tops $193 Trillion.
Global Built Asset Wealth Index to provide an alternative indicator of economic health and prospects for growth.
Middle East and Africa and Asian regions to experience the fastest growth (63%) over the next decade.
• China could outpace USA as world’s wealthiest built asset nation by as early as 2014
• UK and Europe lag behind — subdued built asset growth of 2.7 per cent over next decade predicted
• Singapore citizens have highest built asset wealth per person
• Fastest growth over next decade expected in Middle East, Africa and Asian regions – 63% growth expected across both regions
• Developed nations must develop new sources of competitive advantage using their existing asset base
The global study published by EC Harris provides fresh insight into the current and future prosperity of nations, based on analysis of investment in infrastructure and the built environment. Conducted in conjunction with the Centre for Economic and Business Research, the Global Built Asset Wealth Index quantifies the accumulated wealth of 30 countries’ built assets — encompassing all the property and infrastructure that contributes to economic productivity — to present an alternative indicator of economic health and growth potential.
The Global Built Asset Wealth Index illustrates the differences between 30 countries which represent 82 percent of global GDP.
The Index reveals that total built asset wealth within these countries stands at $193 trillion — the equivalent to almost three times the $68 trillion GDP of the same countries. By 2022, built asset wealth is forecast to increase by 35 percent to reach $261 trillion.
Simon Rawlinson; “Indicators like GDP and unemployment, which are traditionally used to define a country’s performance, only tell one side of the story. While GDP quantifies national income, our analysis of the total stock of built assets provides an indication of accumulated wealth and the resources which can be drawn upon to fuel future economic growth.” — Simon Rawlinson, Head of Strategic Research and Insight at EC Harris
The top ten nations on the EC Harris Global Built Asset Wealth Index are:
Country Built Asset Wealth (US$)
- USA 39.7tn
- China 35.4tn
- Japan 18.3tn
- India 11.8tn
- Germany 10.4tn
- France 7.8tn
- Italy 7.4tn
- South Korea 6tn
- Russia 5.9tn
- Spain 5.9tn
11. UK 5.5tn
13. Brazil 4.8tn
25. UAE 1tn
29. Chile 0.7tn
30. Qatar 0.3tn
China set to outpace the USA
The Index reveals that the USA is the world’s most asset rich nation, with total built asset wealth estimated at USD 39.7 trillion. This is forecast to increase to USD 47.2 trillion by 2022 — a rise of 19 percent. However, China is rapidly gaining ground on the USA and could overtake it by as early as 2014. By 2022, China is expected to have accumulated USD 75.7 trillion in built assets.
Singapore has the highest asset wealth per head
When it comes to built asset wealth per person, and therefore the potential of built asset wealth to affect living standards, Singapore has by far the wealthiest population, with an estimated built asset wealth of USD 156,000 per person. India and China have less than USD 40,000 built assets per person, while developed economies have structurally higher levels of built asset wealth, averaging USD 125,000 per person.
UK and Europe lag behind
The UK appears to lag behind its peers in terms of built asset investment, with a wealth per person of USD 88,000 – some 29.2 percent below the average level of developed economies. This huge gap suggests the UK has significantly under-invested in built assets over many years.
In ten of the economies in the study — including Japan, France, Germany and the UK – the stock of built assets per person is estimated to have fallen in 2012 compared to the previous year, with the most severe decline of -2.1 percent in Japan. The potential for built assets to contribute to the economy and generate income for the populations of these regions is in decline.
Simon Rawlinson; “These nations need to continue to invest in new and existing built assets to improve mobility, productivity and standard of living, but do not have the available finance to do so. They need to make best use of their existing asset base to develop new sources of competitive advantage.”
The Middle East and Asia — ones to watch
The fastest growth over the next decade is expected in the Middle East and Africa and in Asia. Asia’s built asset stock of USD 84 trillion is expected to increase to USD 137.4 trillion by 2022 — a rise of 62.9 percent. Similarly, the stock of built assets across the Middle East and Africa is set to rise by 63 percent to USD 8.7 trillion by 2022.
The UK and Europe tell a different story. Here, built asset growth is expected to be subdued at around 2.7 percent over the next decade. In some struggling Eurozone economies, investment is forecast to fall short of asset depreciation, leading to a fall in the built asset stock.
Simon Rawlinson; “In a world where the balance of economic power is shifting, we see countries in the East with large cash reserves investing in their built environment at an unprecedented rate, whereas countries in the West have an ageing built environment, but little cash to update it. This has far-reaching consequences for the balance of both economic and political power as emerging economies continue to bridge the gap in accumulated wealth.
Our Global Built Asset Wealth Index provides an important indicator of the productive potential of economies across the world. 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.
Built assets are the literally the building blocks of an economy. Through compiling this study, we can pinpoint the trends which will inform how countries plan, create, operate and redefine their built assets in a way that fosters economic and social growth, across sectors and geographies.” — Simon Rawlinson, Head of Strategic Research and Insight at EC Harris