A report published this week by Oxford Economics, commissioned by the Global Cement and Concrete Association (GCCA), highlights the gap between the infrastructure society needs and its ability to deliver it affordably and sustainably.

Entitled “Concrete’s enabling role in building a sustainable and resilient future”, the report argues that population growth, urbanisation, ageing assets and climate adaptation are increasing construction requirements. Yet access to finance, planning constraints, skills shortages and the availability of energy and materials limit delivery. Decarbonising production adds further investment requirements: “Maintaining affordability while enabling decarbonisation is therefore a structural tension.”

The report forecasts global construction activity rising from US$9.7tn in 2025 to US$16.6tn by 2050, but the regional picture varies considerably. Emerging economies in Africa and Asia face substantial housing and infrastructure deficits, while mature economies must repair and modernise ageing assets. For cement producers, demand growth may therefore occur far from existing spare capacity, limiting the usefulness of surplus production elsewhere.

Because the forecast measures construction value, the projected increase of more than 70 per cent does not translate directly into growth in cement consumption. Better design and performance-based standards can enable lower binder content, reducing cement requirements, while clinker substitution changes the production capacity and processing equipment needed to supply them. Investment decisions consequently encompass kilns, grinding plants, SCM processing and distribution. 

The report expects the number of megacities exceeding 10m inhabitants to increase from 45 to 66 by 2050, with growth concentrated in Asia and Africa. Providing those populations with water, sanitation, transport and electricity requires substantial expenditure well before the full economic benefits are realised.

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Oxford Economics identifies bankability as a constraint on attracting private capital: projects need dependable revenues, credible allocation of risk and clear development pipelines before investors will commit. Guarantees, concessional lending and blended finance can help attract capital, while availability payments and regulated revenue models can make investments more dependable.

The viability of these arrangements still depends on governments and users being able to meet their commitments. A sewer network can improve health, productivity and property values without generating sufficient revenue for its operator to recover construction costs. Where household incomes constrain charges and public finances limit subsidies, the social justification for investment may be stronger than the financial case.

Nigeria illustrates the gap between infrastructure requirements and available public funding. Its Infrastructure Concession Regulatory Commission estimates that the country needs approximately US$100bn annually for infrastructure development but government spending currently covers less than 30 per cent of that requirement. The shortfall helps explain the government’s emphasis on attracting private capital, but also demonstrates why infrastructure need cannot automatically be translated into prospective sales in cement or other building materials.