Effects and scenarios of infrastructure spending in Italy. Sace report

Effects and scenarios of infrastructure spending in Italy. Sace report

Expected growth in infrastructure spending will exceed that forecast for GDP over the next five years . Ports, airports and railways will be the sector that will grow the most, followed by infrastructures for electricity and gas. This is what emerges from the focus published by Sace.

Italian infrastructure spending is expected to grow by 2.6% in the period 2021-2026 and, in the decade, by an average of 1.7% per year.

This is a rate higher than the eurozone average (+ 1.5%) and GDP growth. This is what emerges from Sace 's focus on 'Yesterday, today and tomorrow: infrastructures in Italy' with a study carried out by Oxford Economics and analysis by Cresme.

"The expected increase in investments in infrastructures marks a clear change of pace compared to the past", reads the report that recalls how in Italy "investments in infrastructures have steadily decreased over time" with an expense that, since the global financial crisis from 2008 to 2021, it contracted on average by 2.8% per year (five times the rate at which GDP decreased in the same period).

Ports, airports and railways will be the sector that will grow the most in the next five years (+ 3.8% on average per year), followed by infrastructures for electricity and gas (+ 3.2%), driven by the push to green and the energy transition.

From the Verona-Brenner and Naples-Bari railway lines to the port of Genoa, from the new airport hub in Brescia to the new offshore wind farms in Sardinia, the infrastructural developments will involve the entire Italian territory.

According to the focus "the resources of the NRP are the primary source of financing" and "the banking system and the support of Sace will be able to expand the necessary resources".

"The Sace Report on infrastructures confirms the soundness of the strategy followed by the Government to provide the country with the necessary capital to increase the competitiveness and well-being of people, with a view to environmental sustainability" commented the Minister of Infrastructures and Mobility sustainable, Enrico Giovannini.

All the details.

THE POST 2008 LOSS

From the Global Financial Crisis to the pandemic, Italian spending on infrastructure contracted by an average of 2.8% per year (5 times the rate at which GDP decreased over the same period), from € 65.3 billion. in 2008 to 45.3 billion euros in 2021; this dynamic was common, albeit to a lesser extent, also to the Eurozone, with Spain and Greece recording the greatest contractions. The decline was more marked in the first part of the period under review mainly due to a lower spending capacity linked to the effects of the financial crises which was also reflected in a contraction in infrastructure investments.

THE ARREST WITH THE PANDEMIC

The onset of the pandemic crisis has marked a new setback in the growth of recent years – despite the fact that the construction sites have never completely stopped – also due to the difficulties in supplying materials. The stimulus measures of the government and the European resources have therefore restarted and, indeed, will give a further acceleration to the activities of the sector also in the coming years.

ITALY MAIN RECIPIENT OF EU FUNDS

Italy is, in absolute value, the main recipient of the European funds of the NGEU, largely divided into investments (and reforms) in the infrastructure sector according to the PNRR. These resources will also have positive repercussions on sectors of the Italian economy that are not directly recipients (such as manufacturing and services). The funds and reforms made available by the EU are part of a broader context of investments in the sector by the government, which will also be able to count on the resources coming from the complementary fund and from the budget gap.

The expenditure for investments in infrastructures and mobility under the responsibility of MIMS will generate, in fact, the activation – direct and indirect – of added value in the production system for a value of approximately € 37.8 billion (+ 2.4% compared to a scenario without such investments included in the PNRR) and an aggregate rate of return of 63%, which will rise to approximately 77% for investments in construction, reaching the maximum value for those in research and development (88%).

GROWTH IN INFRASTRUCTURE EXPENDITURE WILL EXCEED THAT FOR GDP

Over the next decade, Italian infrastructure spending is expected to grow on average by 1.7% per year, a rate higher than the eurozone average (+ 1.5%), but above all clearly above the pre-pandemic forecasts. (+ 0.9%). Growth will be more accentuated in the 2021-2026 period (+ 2.6%), to become less intense in the following five years (+ 0.9%) due to the combined effect of lower public spending and a reduction in the workforce due to aging of the population.

The expected growth in infrastructure spending in the period under review will exceed that forecast for GDP, thanks to the huge funds available, the planned implementation reforms and, last but not least, the renewed confidence both nationally and abroad. This trend is consequently also reflected in the infrastructure expenditure / GDP ratio which over the next ten years will average 2.8% (compared to the average 2.3% in the 2015-2021 period), reaching the end of the horizon forecast 3%.

WHO ACCELERATES AND WHO BRAKES IN THE DIFFERENT COMPARTMENTS

In 2021, road construction continued to represent the first item of expenditure with an amount of € 19 billion (although € 8.1 billion lower than in 2008), corresponding to a weight of approximately 42%; followed by railways, ports and airports (so-called other transport), whose expenditure has halved, leading to a reduction in its share to 17%. Electricity and gas infrastructures, on the other hand, doubled their incidence on the total (16.5%), while spending on water and waste management infrastructures fell by € 4.3 billion. The other infrastructures have kept their share almost unchanged (18.5%), accepting however € 3.2 billion less in resources.

PORTS, AIRPORTS AND RAILWAYS WILL GROW

Ports, airports and railways will be the sector that will grow the most in the next five years (+ 3.8% on average per year), followed by infrastructures for electricity and gas (+ 3.2%), driven by the push to green and the energy transition, in a logic of increasing the technology used in the areas of efficiency, safety and environmental sustainability. From the Verona-Brenner and Naples-Bari railway lines to the port of Genoa, from the new airport hub in Brescia to the new offshore wind farms in Sardinia, the infrastructural developments will involve the entire Italian territory.

Furthermore, the sector will not only benefit from the funds linked to the PNRR, but will also be at the center of those projects already in place before the start of the pandemic, such as the interventions for the 2025 Jubilee, the works for the Milan and Cortina Winter Olympics and for the 2026 Taranto Mediterranean Games.

A strengthening of the airport system is also planned, which will see Brescia become a hub for cargo traffic.

Instead, road transport is expected to grow, in terms of investment spending, at a lower rate than other infrastructure sectors, seeing its weight on the total drop from 42% to 40%. This phenomenon must be seen in a retrospective framework in which the sector has been the main recipient of spending on infrastructure investments for several years, the Sace report points out.

THE COLOD IRONING NATIONAL PLAN

With reference to ports, on the other hand, among the main purposes of the interventions dedicated to them, there are that of greater energy efficiency and resilience to climate change (for example the National Cold Ironing Plan provides for the electrification of the docks with the aim of lowering the emissions into the sea and into the air from docked vessels).

The projects concerning the ports of Trieste (Adriagateway project) and Genoa fall within this perspective, the report highlights.

RECOVERING THE INFRASTRUCTURE DELAY OF THE MIDDAY

Many of the works that will be built or strengthened are located, as foreseen by the Plan, in Southern Italy to be able to bridge the infrastructural delay that has penalized the South for years, the Sace report underlines.

THE COMMENT OF MINISTER GIOVANNINI

"The international comparison shows that in Italy investments in infrastructures will grow more in the coming years than in other countries, even beyond 2026, the year of conclusion of the NRP, bringing the ratio between infrastructure spending and GDP to an all-time high", declared the minister. of Infrastructures and Sustainable Mobility, Enrico Giovannini, commenting on the Sace Report.

"As the Report demonstrates, the slogan" Ten years to transform Italy "that I have used since the first day of my mandate – continues the minister – has been transformed into concrete decisions, shared not only by the Government, but also by the Regions and by local authorities. Now it is a question of continuing on this path, deciding the allocation of the resources of the Development and Cohesion Fund 2021-2027 and of the European funds 2021-2027 (over 130 billion in total), as well as those of the next budget law, to complete the design that MIMS has offered to the country with the recent Annex infrastructures, logistics and mobility to the Def ".

"On the other hand, the new procedures to speed up authorizations, which are already working for the NRP, the sectoral planning, the reforms that affect many sectors of MIMS competence (port activities, water sector, rail, sea, road transport , etc.), the new rules for the sustainability of infrastructures and mobility systems make the investments planned for the next few years a great opportunity for the transformation of the Italian socio-economic system ”concluded Minister Giovannini.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/effetti-e-scenari-delle-spese-per-infrastrutture-in-italia-report-sace/ on Mon, 01 Aug 2022 14:21:50 +0000.