The 2017 CMS Infrastructure Index, titled ‘A New Direction’, shows that the UK has fallen from first to fourth in a global ranking of attractiveness as a destination for infrastructure investment.
The Index shows that Brexit and the general election have created political uncertainty for the UK infrastructure market, underscored by slow progress on megaprojects.
Our findings have been reinforced by many recent news stories. For example, the Construction Industry Brexit Manifesto, supported by the UK’s major construction umbrella groups and federations, warns that many of the country’s construction workers – including nearly 50% of those in London – are EU27 nationals and that retaining them is a critical concern for the industry. And the National Infrastructure Commission has cautioned that “the UK’s decision to leave the European Union makes the future of financing through the European Investment Bank uncertain”, adding that “there may be further implications for levels of investment in infrastructure in new and ‘risky’ sectors.”
The lack of political consensus over new megaprojects has been the root of frustration and delays for years, and Brexit is exacerbating the situation in the short term. Any pipeline of infrastructure projects, as well as renewable energy programmes, may find itself scuppered by the scale of work required by UK institutions in preparation for Brexit, which will dominate the agenda of government and national agencies for the foreseeable future.
Political stability is critical to encourage infrastructure investment. Our research shows that countries with clear strategic vision for infrastructure are performing most strongly. Politics and policy remain central to shaping infrastructure investment flows globally.
To read more about our 2017 Infrastructure Index, click here.