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While the pace of digitalisation across the built and natural environments continues to gather momentum, there remains a significant opportunity for the construction sector to invest more widely in adopting model-centric and data-driven work processes and practices. The benefits of digitalisation (the adoption of digital technologies, defined for the purposes of this report as BIM and digital twins) are well understood by many market participants. Still, many barriers to adoption remain across a sector that is fragmented, under continual cost and time pressures, and frequently criticised for spending less on research and development than comparable industries. In addition, to support traditional construction processes such as cost estimation, prediction, planning and control; progress monitoring; and health, safety and well-being, the sector is now having to address other practices with some urgency. These include incorporating environmental, social and governance (ESG) principles; designing and measuring social value; implementing whole-life and whole-asset thinking; and carbon footprint calculation, benchmarking and reporting across projects.

To understand the sector’s current thinking around digitalisation, four additional questions were added to the RICS Global Construction Monitor (GCM) survey, which is produced every quarter. This report analyses the global responses received during the Q4 GC  2021 survey, which closed on 20 January 2022. The results represent a snapshot of current sentiment and behaviours from a sample of the sector. RICS’ professional sentiment monitoring has been found to accurately foreshadow market movement, and the GCM is a resource to be considered alongside other sources when assessing market trends or conducting market analysis. Monitoring market sentiment around digitalisation in construction supports a level of confidence in both assessing current levels of adoption and predicting the direction of travel for the sector. By repeating these new survey questions on an annual basis, RICS will be able to demonstrate the continued pace of adoption and the nature of the continuing barriers and challenges being faced by the sector.

The results point to a globally consistent level of digitalisation. They show a current focus on the well-established needs of the sector, but also indicate growing use of digitalisation in construction around the emerging themes of ESG, social value and whole-life concepts. There is also a consistent understanding of the barriers to further adoption. While other data and technology approaches have already been applied across the sector, it is the power of building information modelling (BIM) with its higher dimensions of time (4D), cost (5D), facility management (6D), sustainability (7D) and health and safety (8D), coupled with digital twins, that has the potential to provide the most additional value over the coming years.

Much has already been achieved and implemented by many market participants. However, to address the profound impact of construction on our world, the sector must move even faster to reap the benefits of BIM and digital twins. In this digital transformation journey, RICS professionals – particularly those working in quantity surveying and construction, project management, building surveying and infrastructure pathways – can play a significant role.

 

Our new data finds that private investment in developing-country infrastructure is rebounding from historic lows recorded in 2020. Commitments totaled $76.2 billion in 2021, a 49% increase from 2020. Although this recovery is a positive sign, daunting challenges remain. Overall commitments still lag 12% lower than the previous five-year average, an indicator that recovery from the deep recession triggered by COVID-19 is still underway. 

 

Sommaire : 

- Introduction

- News from the Global Infrastructure Initiative

- Engineering the energy transition: An interview with Aleida Rios of BP

- Capturing the net-zero opportunity with portfolio synergies

- The innovation function: An interview with Shaun Kenny of Bechtel

- Infrastructure for a net-zero economy: Transformation ahead

- How big business is taking the lead on climate change.

 

Construction, however, has again proved itself extremely adaptable during the last year in responding to the difficult circumstances. We have seen sustained delivery of housing and infrastructure across most global markets, better use of data, and increasing investment in technological solutions such as modern methods of construction, all of which can improve efficiencies and aid the drive to net-zero.

This adaptability will prove vital as businesses ready themselves for the uncertain and inflationary environment ahead. This theme is central to our 2022 International Construction Costs Index, which highlights dramatic price fluctuations in many regions around the globe.

While there is healthy confidence in the future of the construction sector internationally, differing government COVID-19 strategies have resulted in varying paces of recovery. Meanwhile labor and skills shortages have caused supply and demand challenges in many areas, such as Europe.

These shortages have been felt across the supply chain, forcing businesses to tackle pressing and persistent problems such as low productivity, staff retention and project resilience.

Our five-point plan later in this report provides a pragmatic guide to dealing with the unique challenges of 2022.

Sustainability is equally high on the agenda. Construction and operation of built assets is responsible for 38% of global greenhouse gas emissions, according to the UN Environment and International Energy Agency’s 2019 Global Status Report. COP26 also emphasized the growing need to transition away from fossil fuels, as our recent 2021 Supercharging Net Zero report details.

In the face of ongoing material shortages, efficiency and productivity remain a must. In this respect, the need for efficient design is likely to drive further investment in innovative solutions, while a big push from many governments, both in terms of financial support and the implementation of legislation, has crystalized longterm sustainability commitments.

While on the surface the looming market conditions sound unfavorable, we believe these challenges more than ever present our industry with a great opportunity to drive forward innovation. In order to reduce our impact on the environment and our reliance on resources, we need to adopt a mentality of doing more with less.

This report will give you the insight you need to navigate the current and future challenges ahead. It will show how flexible, pragmatic decision-making can allow businesses to adapt to fluctuating and unpredictable conditions and put themselves in a market-leading position to take advantage of a period of growth.

 

This publication explains how countries can establish strong public–private partnerships (PPP) to help bridge deep funding gaps and build the climate-resilient infrastructure they need.

 

Points clés : 

- 40 public-private partnership transactions reached financial close for an aggregate value of €8.0 billion.

- In value terms, the market decreased by 13% compared to 2020.

- Despite expectations of a greater reduction in activity due to the impact of the COVID-19 pandemic, the number of projects decreased by just 7% compared to 2020.

- The most active markets were Italy in value terms and France in terms of the number of projects.

- 13 countries closed at least one public-private partnership project compared to 11 in 2020.

- Transport was the largest sector both in terms of value and number of projects.

- The rise in demand/revenue-based projects has continued with more than two-thirds of transactions taking this form.

 

The pandemic and associated disruption are prompting new thinking about infrastructure. Governments around the world are investing in infrastructure to deal with this new reality and to help jump-start the recovery. These infrastructure funds are coming at a time when several larger trends are changing the way we think about infrastructure: Economic stimulus for a postpandemic rebuild ; Focus on environmental sustainability ; Emphasis on greater social equity ; Technology.

 

Sommaire : 

- Introduction

- News from the Global Infrastructure Initiative

- Changing project delivery to meet net-zero targets

- Transforming capital projects to deliver net-zero emissions

- Building better capital projects through sustainability benchmarks

- Leveraging infrastructure investment to meet net-zero goals

- Upgrade the grid: Speed is of the essence in the energy transition

- Decarbonizing the built environment: Takeaways from COP26.

 

Evidence of public expenditure on infrastructure is extremely sparse. Little is known about the trends and patterns of infrastructure expenditure, and there is no real basis for assessing the adequacy and efficiency of infrastructure spending. Drawing on the World Bank’s novel BOOST database, this paper provides a first relatively disaggregated picture of infrastructure spending trends and patterns for a large sample of more than 70 developing countries covering 2010–18, drilling down into expenditure by sector for roads as well as electricity, and distinguishing operating from capital expenditure. Complementary sources of data are tapped to allow comparison between expenditure patterns on and off budget. The study finds that on-budget expenditure on infrastructure has been low both in absolute terms (1 percent of gross domestic product) and relative terms (5 percent of total public spending), as well as declining over time. Overall, infrastructure spending declined by about one-third over 2010–18 (with the road sector bearing the brunt of the decrease), and now lies well below estimates of the required levels, except in a handful of cases. There is evidence that low-income countries, despite lower spending envelopes, attach greater priority to public investment and infrastructure spending than their middle-income counterparts. Econometric analysis suggests that infrastructure spending in low- and middle-income countries has been historically procyclical, although to a lesser degree than total expenditure. In the transport sector, road funds are shown to play a substantial role in funding road maintenance, appearing to improve the adequacy of funding, while attenuating pronounced capital biases in road sector spending, but there is little evidence of efficiency improvements over time.

 

This will be a year of setbacks and recoveries — and recoveries and setbacks. We see 2022 as a year of opportunity as the world learns from the past and works to rebuild with more resilience, sustainability and equity. Yet it will also be a year of uncertainty as new challenges emerge and social expectations continue to shift as we learn to live in a world with (not after) COVID. And infrastructure leaders have an opportunity to fundamentally change our collective path on the climate, social, and governance agenda.

Like it or not, the infrastructure decisions we make this year will set the stage for how the world will evolve over the next century. If we get it right, we have an unprecedented opportunity to catapult humanity forward into a cleaner, more productive and more equitable future. But if we get it wrong — if we allow our differences to supersede our collective interest — we will bequeath our children a very bleak future indeed.

Making the right decisions on infrastructure will require four things — insight, agility, collaboration and bravery.

 

Private investment in infrastructure projects in primary markets is not increasing, but it weathered the pandemic shock.

Mobilising private capital is key to closing the infrastructure financing gap and has become even more critical as the COVID-19 pandemic has further limited the investment capacity of governments. For the past seven years, private investment in infrastructure has remained stagnant, and lower than it was 10 years ago. The USD156 billion invested in infrastructure projects by private investors in 2020 represents 0.2% of global GDP, far shy of the 5% of global GDP (combining public and private investment) some studies indicate is required to close the infrastructure gap. It also pales in comparison to the USD3.2 trillion in infrastructure stimulus announced by G20 governments, identified in our InfraTracker (GI Hub, 2021).

The resilience of private investment in infrastructure projects to pandemic shocks is however a positive sign. While several sectors of the economy were significantly affected by the pandemic, private investment in infrastructure projects was resilient overall in 2020 compared to 2019.

High-income countries attract around three-quarters of all private investment in infrastructure projects. (To put this in perspective, high-income countries represent around 60% of global GDP and have about 50% of total public and private investment in infrastructure.) And despite severe disruption due to the pandemic, those volumes did not decrease in 2020. In contrast, private investment in infrastructure in middle- and low-income countries represents only a quarter of the total global private investment in infrastructure, and it declined by 28% in 2020.

Globally, lockdowns and restrictions in 2020 negatively impacted investments in the transport and energy sectors, while investment in the social and telecommunications sectors increased significantly – driven by the response to the pandemic and rise in online activities.

Even in the midst of the pandemic, investors showed strong appetite for renewables, with this sector attracting almost 50% of total private investment in infrastructure in 2020, mostly in wind and solar projects. However, it is notable that in high-income countries, almost 55% of the private investment in infrastructure projects went to renewable energy generation in 2020, while in middle- and low-income countries, that percentage was only around 20%, compared to over 25% for non-eenewable energy generation.