- January 1, 2021: Vol. 14, Number 1

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Infrastructure outlook — key themes for 2021. Light at the end of the tunnel?

by Declan O’Brien and Alex Leung

At year end, the infrastructure sector looked to have weathered the COVID-19 crisis reasonably well. While certain subsectors were severely impacted, first quarter 2020 valuations for the sector were more resilient than other alternative asset classes and infrastructure companies saw fewer downgrades and defaults than their equivalent corporates. With a vaccine in sight, policy makers will continue to focus on how to support the economy in the interim. Fiscal stimulus looks like an attractive proposition. Government spending is likely to be directed toward supporting jobs while also investing in healthcare, decarbonization and digital infrastructure, potentially providing a boon for infrastructure investors.

The pandemic has impacted different infrastructure sectors to different degrees, with GDP-correlated assets such as airports, ports and toll roads most exposed to the ongoing economic shock. Social infrastructure, renewables and telecoms have seen less of an impact.

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