Statistics BriefJune2012► Infrastructure Investment

OECD Countries Spend 1% of GDP on
Road and Rail Infrastructure on Average
The latest update of annual transport infrastructure investment andmaintenance data collected by the International Transport Forum at theOECD shows that for the last 15 years:► Investment in inland transport infrastructure has remained
constant at 0.8% of GDP for the OECD (excluding Japan) and thevolume of investment has grown 30%;
►In North America and Western Europe the GDP shares forinvestments in road, rail and inland waterways are constant,whereas in many developing and transition economies transportinvestment as a share of GDP is increasing;►Western European economies have invested increasingly in rail
while in Central and Eastern European countries the focus is onroads;►While record investment levels were reached in Central andEastern European countries in 2009, the latest data show decline
for the first time (-11% in real terms in 2010).

Our most recent data show that gross fixed capital formation (investment) ininland transport infrastructure as a percentage of Gross Domestic Product (GDP)has remained fairly constant at around 0.8% for the OECD as a whole (if Japanis excluded) over the period since 1995 for which we report data (Figure 1).
Japan has followed a different trajectory and its economy is large enough toaffect the overall average for the OECD significantly. Including data on Japan
results in a declining trend over the period, but a higher overall average for
2010, with a 1% share of GDP for the OECD total. Historically, transport
infrastructure investment in Japan was relatively high in relation to GDP but has
been in decline since the 1990s. Expenditures were affected by general budget
cuts towards the end of the 1990’s. Subsequently, modification of the allocationof revenues from gasoline tax, earlier earmarked for highway development andmaintenance, has strongly reduced the level of investment in roads in Japan.

► GDP share ofinvestment
constant indeveloped
economies

The International Transport Forum has collected data on investment andmaintenance expenditure on transport infrastructure since the late 1970s. In
Western Europe, the investment share of GDP has declined steadily from 1.5%
in 1975 to 1.2 % in 1980 and further to 1.0% in 1982 after which it levelled off.
Our latest data show that the GDP share of investment in inland transport1infrastructure has remained between 0.8% and 1.0% on average since the1990s in Western European countries. Only Greece, Spain and Portugal show
significantly higher than average shares over the period 1995-2010 (1.6% –2.0%). Data for North America also show a constant GDP share (0.6%) untilvery recently. The latest estimates indicate a slight growth in investment as ashare of GDP, reaching 0.7% in 2009 and 2010 (Figure 2).
An investment level of 1% per GDP remained a norm for many years, such thatit became de facto political benchmark in the 1980s, though with no theoreticalbasis behind it. The investment needs for transport infrastructure depend on anumber of factors, such as the quality and age of the existing infrastructure,geography of the country and transport-intensity of the country’s productive
sector, among other things. The fact that the share of GDP dedicated totransport infrastructure has tended to remain constant in many countries
suggests investment levels are affected by factors other than real investment
needs, such as institutional budget allocation procedures or budgetary
constraints. The impact of government policy can also be identified, as forexample in Japan and in the data for Australasia. Here, the share ofinfrastructure investment in GDP grew 50% partly as a result of the last fiveyear investment plan in Australia.
Trends for developing and transition economies differ markedly from thosedescribed above. The share of investment in inland transport infrastructure inCentral and Eastern European countries (CEECs), which until 2002 hadremained at around 1.0% of GDP, has grown sharply, reaching 2.0% in 2009 –the highest figure ever reported by these countries (Figure 2). Data for 2010
suggest a drop to 1.7%, affected by the economic crisis.

► Investment

levels indeveloping
countries hit
record highs
in 2009

Data for India suggest a similar growth trend in the GDP share of investments
since 2004. In the Russian Federation the investment share of GDP has been
more volatile. Rising levels of investment in developing economies reflect efforts
to meet rising needs for road network capital, reinforced by the demands ofgrowing economies.
The volume of investment (expenditure in real terms) in the OECD total(excluding Japan) has grown 30% in the last 15 years. If data on Japan isincluded, the volume has remained fairly stable around the 1995 level (Figure3). In Western European countries, the volume of investment started growing in2002, and was 28% above the 1995 level in 2006. The level of investment thendeclined again. The latest data for 2010 show volume 12% higher than the1995 level (Figure 4). The volume of inland infrastructure investment in North
America grew by around 30% from 1995 to 2002. Our estimate suggests a slow
decline in investment volume that continued all the way to 2008. Recent data
indicate again a growth in the volume of investment in North America, returning
to the 2001 level in real terms in 2010.
The volume of infrastructure investment has accelerated strongly in developing
and transition economies, notably in Central and Eastern European countries
since 2003. This growth has turned negative after reaching a record level in2009. Investment in inland transport infrastructure declined 11% in real terms
from 2009 to 2010 (Figure 4).
The share of rail investment has increased from 15% to 23% for the OECD total
from 1995 to 2010, according to our estimate. This trend is mainly determinedby the development in Japan and Europe. Data presented in Figure 5 show
long-run trends in the modal share of investment in Western European and► Volume ofinvestment
increases
slowly indevelopedeconomies► Investment

volumesdecline forthe first timein CEECs► Matureeconomies
investincreasinglyin rail

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Central and Eastern European countries. In the Western European countries,
the share of investment in rail infrastructure has increased steadily from around
20% of total investment in inland transport infrastructure in 1975 to 30% in
1995 and to 40% in 2010. The trend observed in our data for Western Europe ispartly a reflection of political commitment to development of railways and therecent data does not seem to indicate any change in policy.
Whereas Western European countries have increasingly directed theirinvestment toward rail, Central and Eastern European countries are investing
more heavily in roads. The share of roads in inland transport infrastructure
investment increased from 65% in 1995 to 82% in 2010 in this region. The last
five years, however, suggest a stabilisation of the trend and the modal split ofinvestment has remained at 2005 level in 2010 (Figure 5).

► Transition

The available data seems to suggest that the balance between roadmaintenance and investment has been relatively constant over time in manyregions. We estimated the share of maintenance in total road expenditure in ourprevious brief to be between 25% and 35% in Western European and Central
and Eastern European countries. However, there are significant differences
between individual countries as illustrated in Figure 6.

► Maintenance

Infrastructure investments are a key determinant of performance in thetransport sector. However, the sector lacks standardised definitions andmethods for measuring investment – and a fortiori assets. The lack of clear
definitions and common practices hinders meaningful analysis and comparison,and this may undermine decision making. In order to improve future data on
transport investments, the International Transport Forum at the OECD
organised an international workshop on measuring investment in transport
infrastructure. As a follow-up to the workshop, a Task Force was establishedaiming at creating a “best practice manual” to better understand and quantify
the impact of transport investment on the economy, to increase themeaningfulness of data analysis and to create better tools for decision making.
Findings will be available at the International Transport Forum’s Summit on“Funding Transport” to be held in May 2013.

► Investment

economies
investing inroads

share ofexpenditure
25%-35%

data need tobe improved3

Figure 1. Investment in inland transport infrastructure in the OECD
1995-2010(as a percentage of GDP, at current prices)

1.4

1.2

OECD
10.8

OECD excl.
Japan%
0.6

0.4

0.2

0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: International Transport Forum at the OECD estimate. Note: OECD includes 30 countries (excludes non-ITF states Chile andIsrael; no data for the Netherlands and Korea). See methodological note for details of data and coverage.

Figure 2. Investment in inland transport infrastructure by region
1995-2010(as a percentage of GDP, at current prices)

3.4
3.2
3
2.8
2.6
2.4
2.2
2% 1.8
1.6
OECDaverage
2010

1.4
1.2
1
0.8
0.6
0.4
0.2
0WEC

CEEC

North America

Australasia

JapanIndia

Russian Federation

Source: International Transport Forum at the OECD. Note: WECs include Austria, Belgium, Denmark, Finland, France, Germany,Greece, Iceland, Ireland, Italy, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. CEECs include
Albania, Bulgaria, Croatia, Czech Republic, Estonia, FYROM, Hungary, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia,
Slovakia and Slovenia. North America include Canada, Mexico and the United States. Australasia include Australia and New Zealand.

4Figure 3. Volume of investment in inland transport infrastructure
1995-2010(at constant 2005 prices, 1995=100)
140

130

OECD excl.
Japan120110

OECD100

90

80

7060
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

20092010

Figure 4. Volume of investment in inland transport infrastructure byregion 1995-2010(at constant 2005 prices, 1995=100)

350

CEEC
300

Australasia
250

200

Russia150

North
America

100

WEC

50

Japan
0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

5

Figure 5. Distribution of infrastructure investment between modes(Euros, current prices, current exchange rates)

Road

Rail

IWW

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%
10%

20%

CEECs

WECs

10%
0%

0%
1995

2010

1995

2010

Figure 6. Road maintenance share of total road expenditure 2010(at current prices)

60

5040% 30

20100CanadaCzech
Republic*

Finland

India*

Italy*

Japan*

PolandSwedenUnited
KingdomUnitedStates*Note: * 2009 data.

6About the statistics
The International Transport Forum statistics on investment and maintenance expenditure on transport
infrastructure for 1995-2010 are based on a survey sent to 52 member countries. The survey covers
total gross investment (defined as new construction, extensions, reconstruction, renewal and major
repair) in road, rail, inland waterways, maritime ports and airports, including all sources of financing. Italso covers maintenance expenditures financed by public administrations.
The Secretariat has collected and published data on this topic since the late 1970s. The latest survey
covers the years 1995-2010. Member countries supply data in current prices. In order to draw up asummary of aggregate trends for selected countries, data has been calculated in Euro values at bothconstant (2005) and current prices. In order to ensure comparability, the Secretariat has devoted asignificant amount of effort to collecting relevant price indices in order to make calculations at constantprices. Where available, a cost index for construction on land and water is used. Where these indices
are not available, a manufacturing cost index or a GDP deflator is used.
Despite the relatively long time series, these data are often dogged by problems of definition andcoverage, which make international comparisons difficult. Also there exists no purchasing power parity
corrected general index for transport infrastructure investment. Finally, indicators such as the share ofGDP needed for investment in transport infrastructure, depend on a number of factors, such as thequality and age of existing infrastructure, maturity of the transport system, geography of the country
and transport-intensity of its productive sector. We therefore advise caution when making comparisonsof investment data between countries.
Aggregates
OECD: Excludes non-ITF states Israel and Chile (at the time of data collection). Data are not available
for Korea and the Netherlands.
WECs: Include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy,
Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
CEECs: Include Albania, Bulgaria, Croatia, Czech Republic, Estonia, FYROM, Hungary, Latvia, Lithuania,
Montenegro, Poland, Romania, Serbia, Slovakia and Slovenia.
North America: Canada, Mexico and the United States.
Australasia: Australia and New Zealand.
Estimations for missing data
The following data are estimated for 2010: Japan road based on MLIT statistics on construction
investments; Norway based on KOSTRA and STATRES databases; Switzerland rail based on VöV
Schweiz, road based on 2009 data; United States 2004-2010 private rail investment based on U.S.
Census Bureau data on Construction Spending. Public rail investment estimated based on Bureau of
Economic Analysis data on Investment in Government Fixed Assets (transportation) using fixed sharefor rail investment based on 2003 data. Inland waterways investment estimated based on data fromU.S. Census Bureau data on Construction Spending (from 2003 level annual change)). For Austria,Belgium, Greece, Italy and Luxembourg estimated based on 2009 data; Greece and New Zealandestimate 1995-2000; Japan not including private investments. New Zealand excluding rail.
This summary covers only aggregate trends in inland transport infrastructure(road, rail, inland waterways). Detailed country data on other items(maritime ports and airports) together with more detailed data descriptions
and a note on the methodology are available at:
http://www.internationaltransportforum.org/statistics/investment/invindex.html

Presentations from the International Workshop on Measuring Investment inTransport Infrastructure
If you would like to receive more information about this Statistics Brief, pleasecontact Mr Jari Kauppila (jari.kauppila@oecd.org). Information about theinternational workshop and data requests, please contact Mr Mario Barreto(mario.barreto@oecd.org).

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