The value of announced greenfield projects in developed economies, which will be invested over several years, fell by 16% to $ 289 billion in 2020, according to a report by the United Nations Conference on Trade and Development (UNCTAD).
Meanwhile, global GDP recovers during 2021 as Covid-19 vaccination programs continue and restrictions related to the pandemic are eased.
In the United States, Covid-related measures continue to decline, and GDP is driven by the substantial additional fiscal stimulus that has been agreed, so that it rises above its pre-Covid-19 level very rapidly.
For its part, according to the Bank of England, in the euro area, activity is recovering more slowly, exceeding its pre-Covid-19 level in the first quarter of 2022, reflecting a more persistent impact of the pandemic and less fiscal support.
Furthermore, weak business investment is likely to influence capital stock growth and reduce productivity growth, and unemployment is expected to be somewhat higher in some countries than before the pandemic.
However, these healing effects are less than previously expected in most countries.
Greenfield projects
In 2020, manufacturing industries saw the biggest drop (from 32% to $ 99 billion), with an exceptionally large drop in chemicals and refined petroleum and coke.
Likewise, UNCTAD indicates that the value of greenfield projects in services remained relatively stable (at $ 182 billion), while in the primary sector, despite an increase in 2020, greenfield projects remained small in absolute value (7,000 million).
In contrast, the value of announced information and communication projects increased by a substantial 31% to $ 48 billion, the highest level ever recorded.
The most important agreements include TSMC (Chinese province of Taiwan) that announces that it would invest 12,000 million dollars in a chip factory in the United States, and the Spanish Telefónica negotiates a 5,960 million dollars agreement to build a fiber optic network in Germany.
Some large renewable energy projects in developed economies were also announced.
For example, energy company Equinor (Norway) and SSE Renewables (UK) have started building a wind farm in the UK.
The project is expected to require a capital investment of $ 11 billion between 2020 and 2026.
In addition to value, the number of greenfield projects announced in 2020 also decreased, across all sectors.
