Infrastructure investment in international comparison.

Infrastructure investment in international comparison

The standard story

• UK under-invests, though this occurs elsewhere too.

• “The CBI has found that 70% of senior business figures consider the UK’s infrastructure to be poor” (Policy Exchange 2009).

• Some truth that UK tends to low end of economic infrastructure investment.

• But more useful to look more closely, as the OECD data does, though this is still imperfect, both in terms of disaggregation and in length of time series. ITF recommends caution on international data.

Government total investment spending 1960-2006

Trends in overall public investment as % of GDP, 1970-2004

ITF data for West European countries, in global comparison

ITF Trends 1995-2008

Overall investment in economic and social infrastructure 1970-2006

GFCF - Electricity, gas and water supply

GFCF – Post and telecommunications

GFCF – Transport and storage

OECD 1970-2006, electricity, water and gas

OECD 1970-2006 transport, storage and communications

Energy production investment 1990-2008 (Germany, UK, France, Netherlands, top to

bottom)

Air transport 1990-2008 ((UK, Germany, France, Netherlands top to bottom)

Transport and storage 1970-2008 (Germany, France, UK, Netherlands top to bottom)

Transport, storage and communications 1970-2008 (Germany, Spain, France, UK, Netherlands,

top to bottom)

Collection, purification and distribution of water 1990-2008 (France, Germany, UK, Netherlands

top to bottom)

Overall Australian GFCF data

• Generalised decline in most sectors (not post and telecoms) from mid 1980s.

• UK always low on these graphs, around 1% of GDP for energy and water, 1 to 1.5% for transport.

• Most European countries somewhat higher, especially France, in this data set running to 2003.

OECD STAN data summary

• Germany is highest on energy, transport and water investment, normally by large amount.

• UK top on airports investment, others far behind.

• France and UK often around similar levels on energy, transport and water, though on balance France higher.

Overall picture

• Not a fully conclusive picture in comparing these European countries.

• GFCF data puts UK consistently low and often lowest since 1970.

• But neither OECD nor STAN data make this so striking. There aviation as UK growth sector, and not that much behind France on others.

• Germany always strong on STAN data – reunification as powerful element of this since 1990.

Conclusions

• Many countries have invested more than UK in these decades, but always hard to say what “appropriate” level of infrastructure investment is.

• Australian analysts have tussled with this, but no “objective” answer reached.

• It depends on your goals...• So, in my view, we should be very careful with

CBI, ICE etc type judgements of “infrastructure gaps”. Statistics cannot prove this.