SINGAPORE (July 8): According to law firm Norton Rose Fulbright’s seventh ‘The way ahead’ transport survey, nearly half of all respondents are looking to Asia Pacific as the key market for investment in the transport sector, with China and India as popular the most jurisdictions, followed by the US.

Lower oil prices, the impact of infrastructure improvements as well as a growing availability of funding has spurred the confidence of aviation and rail industry investors – but shipping appears to remain the least optimistic due to overcapacity in many sub-sectors of the market.

A key theme for the sector is infrastructure, which remains the greatest challenge to the aviation, rail and road industries. While 19% view improvements in infrastructure as the best investment opportunity, a quarter of respondents see infrastructure investment as the most helpful form of government support.

Investment in technology is also expected to rise by 67% of the survey participants, with carbon technology and predictive analytics projected to be the most significant driver of change in the transport sector.

“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth,” says Harry Theochari, global head of transport at Norton Rose Fulbright.

“The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.”

Theohari believes the adoption of new technology will help to address numerous issues the sector has been grappling with in recent years, such as increasingly stringent environmental legislation and efficiency in repairs, maintenance and forecasting consumer behaviour.

The greatest overall threat to the transport industry is a global recession, as agreed by 52% of respondents.

However, it is still clear that most anticipate the sector to enjoy further growth in the near future – with bank debt, capital markets and private equity expected to continue representing transport businesses’ main sources of funding over the next five years.