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Urbanization

Rebuilding America: The Coming Opportunity in Infrastructure

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It’s hard for most stakeholders to get excited about replacing an aging bridge.

Chaotic construction can disrupt the flow of traffic for many years, while annoying many of the local residents. Even worse, such projects usually go over budget, ultimately costing millions or even billions in taxpayer dollars.

At the end of the day, you have a new and improved bridge – but was it really worth all the hassle?

Rebuilding America

It’s not always easy to see short-term ROI in replacing aging infrastructure, especially when there are many other pressing challenges for society to tackle.

However, perpetually kicking the can down the road eventually leads to a situation that works in nobody’s favor. If streets, highways, rail, subways, airports, and bridges are all crumbling, the economy could eventually follow suit.

Rebuilding America: The Coming Opportunity in Infrastructure

According to the latest report card by the American Society of Civil Engineers (ASCE), infrastructure in America barely gets a passing grade with a mark of D+.

Here is how things break down, by specific type of infrastructure:

Infrastructure TypeGradeInfrastructure TypeGrade
RailBWastewaterD+
Solid wasteC+RoadsD
BridgesC+AviationD
PortsC+DamsD
EnergyD+Drinking waterD
Hazardous wasteD+Inland waterwaysD
SchoolsD+LeveesD
Public ParksD+TransitD-

The situation is grim – and the organization says that the country needs to spend an extra $2.1 trillion by 2025 to avoid making the situation worse.

Why Investors Should Care

Infrastructure is decidedly unsexy for investors.

However, it does come with some major benefits – in fact, JP Morgan Asset Management says that infrastructure investments tend to have low correlation with other asset classes, helping portfolio diversification. In addition, infrastructure is often protected from inflation, while providing a high yield and stable cash flows.

Here are some ways that regular investors can get access to the infrastructure sector:

  • Materials stocks: Millions of tonnes of cement, concrete, steel, and other materials will be needed
  • Construction and engineering stocks: These are the companies that will get the contracts to rebuild America
  • Heavy machinery manufacturer stocks: Heavy machinery will be needed to get construction jobs done
  • Infrastructure ETFs: Alternatively, there are thematic ETFs that build their funds around infrastructure

How will you try to play the coming infrastructure boom?

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Urbanization

Ranked: The World’s Largest Cities By Population

This graphic uses data taken from latest official censuses and projections to rank the largest cities by population.

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Ranked: The World’s Largest Cities By Population

The world has experienced rapid urbanization over the last century.

Today, more than 4.3 billion people live in urban settings, or 55% of the world’s population.

But what is the world’s largest city? Answers to that question will vary greatly depending on which lines are being used to demarcate city boundaries and measure their populations.

The graphic above uses data taken from the latest official censuses and projections to rank the top cities based on the three most common metrics.

The Largest Cities by City Proper

Our first metric is based on the city proper, meaning the administrative boundaries.

According to the United Nations, a city proper is “the single political jurisdiction which contains the historical city center.”

The Chinese city of Chongqing leads the ranks by this metric and has an administrative boundary the size of Austria, with an urban population of 32.1 million.

The city’s monorail system holds records for being the world’s longest and busiest, boasting 70 stations. Chongqing Jiangbei International Airport, is among the world’s top 50 busiest airports. Additionally, the city ranks among the globe’s top 50 hubs for scientific research.

Other Chinese cities dominate the ranking by this metric:

RankCityPopulation (Million)
#1🇨🇳 Chongqing32.1m
#2🇨🇳 Shanghai24.9m
#3🇨🇳 Beijing 21.9m
#4🇮🇳 Delhi16.8m
#5🇨🇳 Chengdu16.0m
#6🇹🇷 Istanbul15.5m
#7🇵🇰 Karachi14.9m
#8🇨🇳 Guangzhou14.5m
#9🇨🇳 Tianjin13.9m
#10🇯🇵 Tokyo13.5m

The first non-Chinese city, Delhi, has been experiencing one of the fastest urban expansions in the world.

The United Nations projects India will add over 400 million urban dwellers by 2050, compared to 250 million people in China and 190 million in Nigeria.

The Largest Cities by Urban Area

This measurement largely ignores territorial boundaries and considers a city a contiguous, connected built-up area.

Demographia describes urban areas as functioning as an integrated economic unit, linked by commuting flows, social, and economic interactions.

By this metric, Tokyo leads the ranking:

RankCity Population (Million)
#1🇯🇵 Tokyo37.7m
#2🇮🇩 Jakarta33.8m
#3🇮🇳 Delhi32.2m
#4🇨🇳 Guangzhou26.9m
#5🇮🇳 Mumbai25.0m
#6🇵🇭 Manila24.9m
#7🇨🇳 Shanghai24.1m
#8🇧🇷 Sao Paulo23.1m
#9🇰🇷 Seoul23.0m
#10🇲🇽 Mexico City21.8m

The city proper houses about 10% of Japan’s population. If the greater Tokyo metro area is considered, including cities like Kanagawa, Saitama, and Chiba, then Tokyo’s total population surpasses 37 million—about 30% of the country total.

Consequently, even with one of the world’s largest railway systems, trains in Tokyo are incredibly crowded, with a boarding rate of 200% during peak time in the most overcrowded areas. The city is also famous for its Shibuya Crossing, the busiest intersection on the planet.

The Largest Cities by Metropolitan Area

Tokyo also leads by our final metric, metropolitan area.

This measurement is similar to urban area, but is generally defined by official organizations, either for statistical purposes or governance.

In the United States, this takes the form of metropolitan statistical areas (MSAs), such as Chicago-Naperville-Elgin or Phoenix-Mesa-Chandler.

RankCity Population (Million)
#1🇯🇵 Tokyo37.3m
#2🇮🇩 Jakarta33.4m
#3🇮🇳 Delhi 29.0m
#4🇰🇷 Seoul25.5m
#5🇮🇳 Mumbai24.4m
#6🇲🇽 Mexico City21.8m
#7🇧🇷 Sao Paulo21.7m
#8🇳🇬 Lagos 21.0m
#9🇺🇸 New York20.1m
#10🇷🇺 Moscow20.0m

As the global urban population continues to rise, new cities, especially in Africa and Asia, are expected to vie for the “largest” tag soon.

The UN projects that by 2050, 68% of the world will live in urban areas.

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