Agenda Item 8.4: Trade and the crisis. Infrastructure: Recent developments and outlook for traffic flows and capacities. Global Infrastructure Needs 2030/50. A project of the OECD International Futures Programme. Infrastructures Project.
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Agenda Item 8.4: Trade and the crisis Infrastructure: Recent developments and outlook for traffic flows and capacities
Global Infrastructure Needs 2030/50 A project of the OECD International Futures Programme
Infrastructures Project • Phase 1: Surface transport, water, electricity, telecommunications (completed 2007) • Phase 2: Transcontinental infrastructures : ports, airports, rail corridors, oil and gas pipelines (on-going) • Three time horizons: Short-term 2015; Medium-term projections 2030; Long-term scenarios 2050
Transcontinental Infrastructures Short Term Outlook to 2015 John White and Barrie Stevens Advisory Unit to the Secretary-General
Current Situation and Outlook to 2015 • Financial and credit crisis – surprisingly sharp impacts on GDP growth, trade and transport demand in 2008-09 • The subsequent recession has been the most severe for decades – and different from previous downturns • Recovery is underway - but the pace of recovery uneven • The Outlook to 2015 is still relatively uncertain – different trajectories in OECD and non-OECD countries
World EconomicTrends – and expected rebound • Deep contraction in advanced economies in 2008-09 • Global recession expected to end in 2009 • Subdued recovery ahead for countries most affected • Return to strong growth in emerging economies - 2010 onwards World GDP - % change Source: IMF October 2009
World GDP and International Trade Growth Trade growth - historically 2 or more times GDP growth Forecasts anticipate substantial trade rebound and growth from 2010 onwards
Impacts on traffic volumes, especially freight and energy Overview of recent forecasts and projections
Aviation Outlook - Passenger Forecasts to 2013 Source: Airports Council International, August 2009 Strong air passenger growth to 2013 - growth above av. long term rate (4.7% p.a.)
Aviation Outlook - Air freight forecasts to 2014 World air cargo – forecast annual growth rates (%) Source: Airports Council International Aug 2009 Projected Air Freight growth well above av. annual rate of 3.8% p.a. (1999-2008)
Maritime Outlook – Forecast growth in Container Port Handling to 2014 Source: Drewry, Oct 2009 Recovery from 2009 fall – but container growth rates below previous trends (>10% pa)
Rail Outlook– Forecast Rail Freight Carriage 2015 Rail Freight carriage index levels – 2000 and 2015 Source: Infrastructure to 2030 report Strong rail freight growth expected in many places – particularly China and India
Oil outlook – forecast growth in primary demand - 2000 and 2015 Source: IEA World Energy Outlook 2009 (Nov.2009) Non-OECD regions – especially Asia and the Middle-East - account for all oil growth
Gas outlook – forecast growth in primary demand 2000 to 2015 Source: IEA World Energy Outlook 2009 Gas ‘glut’ with demand -3% in 2009 – but demand to grow 2.5% pa from 2010-2015
Aviation Outlook – Capacity Shortfall in Europe? • ACI 2008: Before the downturn, 93 airports (with 2/3 of world traffic) were already capacity constrained. In EU, over 60 airports not able to meet demand by 2015 2. Schipol [Director, A/P Development], Oct. 2009. There is ‘no airport capacity crunch in Europe’….. Source: Infrastructure to 2030 report
Maritime – Container Flows and Port Capacity Port Capacity Assessments 1. ESCAP, 2007: Substantial new capacity will be required in all major regions over period to 2015. ESCAP region will dominate the requirements for new berths during this period. 2. Drewry, Oct. 2009: Many ports have invested heavily in new terminals based on surge of post - Panamax tonnage. Neither the ships nor terminals are needed for several years.
Outlook – GDP growth vs World trade & transport(IMF October 2009) IMF 2009: World Trade / Income Drewry, Oct 2009. GDP/container trade • The ‘GDP to container’ trade multiple has typically been well in excess of 2.0 • Unlikely western govern-ments / consumers can fuel similar growth in future - serving to reduce the rate at which container trade growth can exceed global economic activity. Source: IMF WEO 2009
Europe: Rail Outlook – Capacity Shortfall in 2015 Source: UIC Study on Capacity reserve, 2005. Increased rail passengers & freight likely to expose EU capacity shortfalls over 2015-30
Oil outlook – Forecast growth in primary demand Source: IEA WEO 2009 In the oil and gas sector, most companies have announced cutbacks in capital spending - as well as project delays and cancellations. Falling energy investment will have far- reaching and potentially serious consequences.
Gas pipelines – projected routes to Europe Source: Infrastructure to 2030 report - TBA
Conclusions • Financial crisis and recession have taken the pressure off capacity shortfalls in the short term - in all sectors. • However, growth in accordance with ‘Reference Case’ projections would see: a doubling of air passengers in 15 years; a tripling of air freight in 20 years; very large increases in port container handling; and increased demand for oil and gas, particularly during 2015-2030 • in all cases, the largest increases will occur in the Asia/Pacific region, led by China and India. • The hiatus in investment in some locations will exacerbate the previously expected shortfalls – once world GDP and demand rebounds to earlier trend levels.