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Investing in Infrastructure: Key Drivers

The financial advisors in our Perth office are often asked for recommendations on what companies are the best or most reliable investments. Since everyone’s financial situation is different, we can’t really give any specific advice on this blog or over the phone until we have had an individual consult.

All information on our website is general by law, but we are allowed to provide some insight for you from our parent company, AMP Capital. We would like to tell you about infrastructure investment and why it can sometimes make a lot of sense for those trying to maximise their incomes.

What is Infrastructure Investment?

Investing in Infrastructure

Infrastructure investment means investing in companies that build, operate or supply what is considered to be infrastructure. This includes distributors of gas, water, electricity and oil. It also includes communications, roads, airports, ports and toll roads. *

Many companies involved in infrastructure have long-term contracts, monopolies and built-in protection against inflation and other market characteristics.*

Why is it Seen as a “Good Investment?”

Infrastructure has a self-perpetuating growth cycle. The more infrastructure, the more people; the more people, the more infrastructure is needed. Infrastructure helps grow the economy and the economy helps grow infrastructure.*

There are four main sectors that are considered “infrastructure:” water, energy, transport and communication. Water is expected to see a continuation of demand being higher than supply. Energy will continue to be important. The demand for some forms of transport could increase by 200-300%. By 2019, mobile communication is expected to increase by 1000%. *

Government and Infrastructure

Governments used to provide most infrastructure, but the trend is more and more towards privatising infrastructure. As governments become increasingly cash-strapped, they will continue to be less and less able to provide infrastructure on their own. *

Call Approved Financial Planners Today

To learn more about infrastructure investment, call us today for a free consult. Our number is 08 6462 0888.

*AMP Capital, 12 May 2015. “4 Drivers for Infrastructure Investment.”