Asia Pacific to lead global transport growth

Asia Pacific is seen as the key market for investment in transport infrastructure over the next five years, according to a global survey of professionals in the industry.

transport infrastructure
'The Way Ahead Transport' survey, conducted by international law firm Norton Rose Fulbright, found that China and India represented the most popular destinations for investment, followed by the US.But while confidence among respondents from the aviation and rail industries was high thanks to low oil prices, funding availability and the impact of infrastructure improvements, the shipping industry remained far less optimistic because of over-capacity in many areas.Just over half of more than 200 respondents saw the global economic slowdown as the greatest threat to the industry although most still felt the transport sector could expect further growth over the next five years. Rising passenger numbers and freight volumes were anticipated by 73 per cent while a rise in the number of routes and services was anticipated by 52 per cent.More than two-thirds of industry professionals expected investment in technology to rise, with low carbon technology and predictive analytics "expected to represent the most significant driver of change in the transport sector over the next five years".But infrastructure remained a key theme for the sector. "For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries," said the report."Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74 per cent of respondents expect the availability of funds to stay the same, or even increase, over the next five years."Harry Theochari, global head of transport at Norton Rose Fulbright, commented: “The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of over-capacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”
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