Prominent Insights of Japan Infrastructure Market Outlook: Ken Research

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Japan has a highly developed physical infrastructure of roads, highways, railways, subways, airports, harbours, warehouses and telecommunications for distribution of all types of goods and services.  Each of these subsectors enjoys specific driving forces and advantages, as well as being plagued by specific challenges. A common denominator is that they all rely heavily on government spending and PPP projects, which in turn largely hinge on loan or debt-instrument financing. Infrastructure projects are characterised by long gestation periods and cumbersome land clearance and other procedures, which often result in project schedule and cost overruns.

According to the report analysis,’ Japan Infrastructure Market Trends, Statistics, Growth, and Forecasts’  the poor financial health of many infrastructure companies has resulted in lenders seeking to limit their credit exposure to the infrastructure sector, which in turn has made many players cash-strapped. Thus, the market itself has encouraged only larger and financially stronger companies to survive, thereby contributing to sector consolidation. The increasingly affluent and urban middle class are increasing in the Japan. Over the past decade, this has put great strain on existing roads, railroads, ports and airports in the country, both in terms of passenger and freight movement.  The needs of Japan’s foreign trade have put a strain on existing ports in the country, necessitating the construction of new ones. That many infrastructure projects are PPPs means that smaller companies often work side by side with larger ones, which helps them increase their level of specialisation. On the other hand, small-sized companies are not equipped to handle large-scale projects, which means that the sheer size of Japan’s typical infrastructure project (alongside other factors such as access to financing) are conducive to sector consolidation.

As Japan welcomes more international passengers ever and boasts an increasing number of domestic air travellers, it needs more, larger, and better airports too. Japan, therefore, has a substantial project backlog over the short- to mid-term, which bodes well for the growth of its infrastructure sector and the economy in general, given that good infrastructure is essential for successful business activities. Japan transports the majority of its road passengers and cargo on the national highway network, which represents a minuscule share of all roads in the country. There is therefore substantial demand for new roads, as well as for re-surfacing existing roads. The government has adopted measures to attract more FDI into the country in order to boost tourism, both in terms of domestic travellers and large-scale international MICE events. This has also created a higher demand for airports and airport infrastructure.

Moreover, growing urbanization in developing countries will help boost the infrastructure in sectors such as transport and power. Economic prosperity will channel finances towards manufacturing and transportation sectors, which primarily provide and distribute raw materials for the manufacture of consumer goods. Increased spending on infrastructure has a multiplier effect on the overall economic growth, as it demands industrial growth and manufacturing. This, in turn, boosts the collective demand, by improving living conditions.  The government’s focus on developing infrastructure as a backbone sector for economic growth means that administrative, sector-specific challenges are being addressed, which is expected to create a more efficient business environment conducive to the growth of the infrastructure sector as well. Therefore, it is expected that the market of Japan Infrastructure will boost up throughout the forecast amount.

For More Information, click on the link below:-

Japan Infrastructure Market Research Report

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Ken Research

Ankur Gupta, Head Marketing & Communications

ankur@kenresearch.com

+91-9015378249

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