Agility Wanted

Uncertainty Defines the Global Outlook for Infrastructure Projects in the Coming Years

 

By Novid Parsi

Consider two scenarios: a continued downturn in China's economy or an upswing in the global economy.

US$1.7 trillion The amount that global infrastructure spending could vary between 2015 and 2020, depending on the scenario.

IF CHINA'S ECONOMY SLOWS …

US$1.1 trillion Projected decrease in global infrastructure spending through 2020—from US$28.2 trillion to US$27.1 trillion

IF THE GLOBAL ECONOMY SPEEDS UP …

US$600 billion Projected increase in global infrastructure spending through 2020—totaling almost US$29 trillion

60%
of the infrastructure spending reductions would happen in Asia Pacific.

58%
of infrastructure spending increases—US$350 billion—would happen in Asia Pacific.

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Drop in infrastructure spending in oil and gas, coal, metals and minerals extraction

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Jump in transportation and utilities infrastructure spending

75% of infrastructure spending reductions would happen in three industries: extraction, transportation and utilities.

 

7 STRATEGIES FOR AN UNPREDICTABLE ENVIRONMENT

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1. Prioritize essential projects; cut or delay others.

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2. Renegotiate contractors' and subcontractors' terms.

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3. Control schedules, deadlines and costs.

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4. Review projects that see the greatest risk during downturns and create a risk mitigation plan.

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5. Partner with multilateral development banks such as the World Bank, especially in emerging markets.

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6. Form public-private partnerships.

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7. Remember the big picture—the project's ROI.

Source: Capital Project and Infrastructure Spending Outlook: Agile Strategies for Changing Markets, PwC and Oxford Economics, 2016

PM NETWORK DECEMBER 2016 WWW.PMI.ORG
DECEMBER 2016 PM NETWORK

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