In its Global Built Asset Wealth Index Report, built asset consultancy EC Harris and London-based Centre for Economic and Business Research put the combined value of all built assets (residential, commercial and civil infrastructure as well as plant and machinery) across 30 nations representing 82% of global GDP at a whopping $193 trillion in 2012.
The report says that total built asset wealth of US$193 trillion is equivalent to almost three times the $68 trillion GDP of the same countries. By 2022, built asset wealth is forecast to increase by 35% to reach $261 trillion.
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Simon Rawlinson, head of Strategic Research and Insight at EC Harris, said: "Indicators like GDP and unemployment, which are traditionally used to define a country’s performance, only tell one side of the story. While GDP quantifies national income, our analysis of the total stock of built assets provides an indication of accumulated wealth and the resources which can be drawn upon to fuel future economic growth."
The top ten nations on the EC Harris Global Built Asset Wealth Index are:
Country Built Asset Wealth (US$)
1.USA 39.7tn
2. China 35.4tn
3. Japan 18.3tn
4. India 11.8tn
5. Germany 10.4tn
6. France 7.8tn
7. Italy 7.4tn
8. South Korea 6tn
9. Russia 5.9tn
10. Spain 5.9tn
Selected others:
11. UK 5.5tn
13. Brazil 4.8tn
25. UAE 1tn
29. Chile 0.7tn
30. Qatar 0.3tn
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By GlobalDataChina 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 $39.7 trillion. This is forecast to increase to $47.2 trillion by 2022 – a rise of 19 per cent. 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 $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 $156,000 per person. India and China have less than $40,000 built assets per person, while developed economies have structurally higher levels of built asset wealth, averaging $125,000 per person.
UK and Europe lag behind
The UK appears to lag behind its peers in terms of built asset investment, with wealth per person of $88,000 – some 29.2 per cent below the average level of developed economies. This huge gap suggests the UK has significantly underinvested 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 per cent 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 continued: "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 $84 trillion is expected to increase to $137.4 trillion by 2022 – a rise of 62.9 per cent. Similarly, the stock of built assets across the Middle East and Africa is set to rise by 63% to $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 per cent 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 said: "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."
