The COVID-19 pandemic has meaningfully hit most countries in the world, bringing with it a toll on human lives and livelihoods. As governments move to mitigate the public health crisis and support economies through monetary and fiscal policy, many are asking if governments will stimulate their economies with investments in infrastructure.
While we expect some infrastructure investment as a means of stimulus, we expect it to focus on smaller projects aimed at increasing the money supply and getting money into various smaller communities and regional centers.
Yet, longer term, there are several positive drivers for infrastructure as an asset class. The need to lower carbon emissions is not going away; nor is the importance of upgrading and building new infrastructure to achieve lower emissions targets. And part of the world’s response to the pandemic, increasing the urgency of balancing stakeholders in business operations, also looks to be a positive for infrastructure’s outlook. Partly, this is because infrastructure companies are well-positioned to manage a balance of stakeholder and shareholder interests that is a key tenet of the corporate response to the pandemic. The tilt toward managing stakeholder interests has been accentuated by the crisis, as companies have found themselves needing to help employees, customers and the general public during difficult times.
