Insights of Infrastructure trends and predictions by Erwin Kretschner, Global Leader of the Infrastructure, Construction & Environment Practice Group at InterSearch Worldwide.
The Construction industry’s real growth will be moderate compared to 2021. Prices of building materials are expected to decline by mid-2022 although they will remain high by historical standards. Most regional markets will return to pre-Covid 19 industry value, with Latin America being the notable exception.
Beneficiaries will be developers, contractors & investors/financiers, especially in the developed markets.
Public investment across Europe and North America are set to increase, thanks to European Union “Next Generation EU” program and US “Infrastructure Investment and Jobs Act” (IIJA). We can expect a significant rise in public & private Green Infrastructure.
Decarbonisation efforts will significantly increase, with the EU having allocated € 87bn for low-emission transport infrastructure and € 50bn for energy efficiency of buildings, € 55bn for renewable energy.
Italy will be no#1 recipient of EU-funds, € 88bn for green infrastructure investments, followed, by Spain, Poland and France.
Winners will be European & US contractors capable of undertaking green infrastructure projects, renewable energy companies and financiers.
2022 will bring a significant increase in investment & proliferation in hydrogen infrastructure to facilitate low-carbon hydrogen production in context with decarbonization drives.
Winners will be hydrogen project developers & contractors, renewable energy companies, LNG operators, Oil & Gas operators, sustainable financiers & ammonia producers.
Western Europe will emerge as a global hotspot for this nascent technology, based on a growing pipeline of electrolyser projects (6GW by 2024) and by building „hydrogen hubs”, using existing natural gas networks & pipelines for transport of hydrogen gas.
The most advanced markets outside Europe for Hydrogen production and supply are Japan & Australia.
Let’s add some specific Post Covid-19 pandemic industry trends:
- Hybrid working will structurally reduce overall demand for new office space in developed markets but promote the provision of office space in residential environments, such as co-working spaces.
- Accelerated growth of e-commerce will drive commercial building activity away from the construction of large scale, urban retail premises towards localized, small scale warehouses to facilitate ultra-fast /same-day delivery of online orders in urban environments.
- “Onshoring” of supply chains & manufacturing: Covid-19 has pushed globalization towards a reversal.
For industrial building activity, markets in Central & Eastern Europe (CEE) are particularly well-placed to accommodate anchoring of auto manufacturers’ supply chains, particularly electric vehicle battery production sites. Winners will be especially Hungary, Poland and Serbia.
Sourcing of sporting goods, like footwear and apparel, will -at least partially – move closer to markets of consumption, i.e. from SE-Asia to CEE & Mediterranean, North Africa (Egypt, Tunisia, Morocco).
Sources: Fitch Solutions, pwc
About the author:
Erwin Kretschner is leading the Infrastructure, Construction & Environment Practice Group of InterSearch Worldwide.
Currently Partner and Senior Consultant at P&P, and Managing Partner P&P Serbia, before joining InterSearch Erwin built an international career for almost 20 years as Area Manager/ Director / General Manager across Switzerland, Malaysia and Singapore. He collected experience across different industries, such as Industry, Infrastructure and FMCG.
His focus is now on Cross-Border projects across Europe-Asia-America-Middle East & Africa.
