Breadcrumb
Q4 2024 Pulse Survey: Political uncertainty on investors’ minds in latest global investment survey
A year of elections leaves investors awaiting clear signals from new governments on policy direction, with investor sentiment towards US, Canada, France and Germany pegged back. UK remains at low point due to ongoing concerns about regulation.
Sentiment towards some of the world’s biggest markets for private investment in infrastructure is being held back by continuing political uncertainty, according to the latest survey by the Global Infrastructure Investor Association (GIIA).
With new governments coming to power as the survey took place, the outlook and opportunities for investment in the United States, Canada, Germany and France have all declined, the survey suggests, while the UK has yet to improve its appeal.
The survey was taken before the US Presidential election and before the EU’s new Commissioners were confirmed, and during upheavals in German and French domestic politics. It also took place ahead of the UK’s flagship global investment summit, intended to restore investor confidence, and the Autumn budget.
The next GIIA Pulse survey in spring 2025 is expected to show a clearer picture of sentiment towards new governments, with a likely bounce-back in the US as President-elect Trump’s policies become clearer.
Australia, included for the first time in the Q4 2024 Pulse Survey, makes a strong entrance reflecting multi-billion-dollar opportunities for investment in its energy transition towards renewable energy generation and away from carbon-based power sources. Investors also see continuing opportunities in the data centres, fibre, masts and towers that enable the AI-driven, digital revolution.
Jon Phillips, chief executive of GIIA, said:
“Less favourable sentiment towards the world’s three largest markets for private investment in infrastructure reflects the political uncertainties this autumn. New leaders in the US, UK and Europe all have work to do, to restore investor confidence.
“However, fundamental drivers such as the need for decarbonisation, rapid growth in digital communication, and the need for modern transport networks that underpin economic growth, mean that investor sentiment will very likely recover once political stability increases and policy direction becomes clearer.”
Whilst sentiment towards Canada and Australia is positive, investors are searching for a pipeline of projects fitting to the capital they’re ready to deploy. Investors are watching closely as both countries head into an election year.
Within infrastructure sectors, it is sustainable energy generation and batteries, carried by the fair winds of energy transition around the world, to which investors are most favourable. Digital infrastructure, driven by the fast-growing importance of AI, follows close behind.
Ports and cargo terminals, together with railways and rolling stock, are the most attractive assets in the transport sector. However, the recovery in global air traffic passengers to pre-Covid levels has yet to flow through to sentiment towards airports.
The apparent unpopularity of regulated water in the European market is almost entirely driven by the UK’s privatised water sector. Looking at investors’ views on barriers to investment around the world, an unattractive regulatory regime in the UK currently towers over all other obstacles. The water regulator Ofwat is due to publish its final, five-year price determinations in mid-December, which may have a significant impact on sentiment towards the UK market into 2025.