San Diego, Calif. -- The U.S. water and wastewater industry grew 3.2% in 2010 and is expected to grow at a faster but still modest rate of 4.4% in 2011 to $136 billion in revenues, according to new research by Environmental Business International Inc., publisher of Environmental Business Journal.
'Population growth, scarcity, and the need to replace or upgrade old infrastructure or develop new infrastructure have combined to make the global water market one of the steadiest segments of the environmental industry,' said George Stubbs, EBJ senior editor. Water industry revenues have doubled from 1993 to 2011, averaging 4.1% annual growth over the period.
EBI has tracked the water and wastewater industry since 1988. Its annual analysis incorporates 10 segments, including water treatment equipment, chemicals, consulting & design engineering, O&M, instruments, and analytical services. This edition features revenues and growth for all 10 segments from 2009-2011, led by consulting & design engineering at 5.7%. EBJ's ranking of top 20 U.S. water C&E firms in 2010 was led by CH2M HILL, AECOM and Tetra Tech.
Opportunities More Robust in the Private Sector and Outside U.S.
Not surprisingly, executives interviewed by EBJ reported mixed fortunes in the municipal market in 2011. 'Budgets are severely constrained, but on the other hand infrastructure is aging, and spending cannot be postponed indefinitely,' said Stubbs, noting that municipal contracts are increasingly focused on greater efficiency and fee reductions to drive down costs. Not surprisingly, water reuse is becoming a viable option in some states and winning greater acceptance by water agencies as more traditional sources of water become overdrawn.
Water technology and services companies fared better in the private sector, where some industries, notably mining and oil and gas (especially shale gas exploration), are presenting substantial opportunities.
Global water companies reported that large capital projects are mostly taking place outside the United States. The desalination market is also strong internationally, but up and down as it remains dominated by big projects, many of them in the Middle East.
M&A Activity Characterized by Return to High Valuations
In terms of consolidation, mergers and acquisitions in the water industry have returned to the high valuations of the mid-2000s, with the shortage of good water investment opportunities recreating a strong seller's market, concluded Steve Maxwell of TechKNOWLEDGEy Strategic Group, which contributed analysis to this edition of EBJ.
Exhibits and data included in this edition:
- U.S. Water Industry 1993-2011 ($mil)
- U.S. Water Industry, 2009-2011: Size and Growth in 10 Segments
- Top U.S. Water Equipment & Chemicals
- EBJ's Top 20 U.S. Water C&E Firms in 2010
- Top Desalination Markets
- Global Desalination Market
- Water Rights Pricing Trends
Companies profiled in this edition:
- MWH Global
- WS Atkins
- Environmental Operating Solutions
- Drake Water Technologies
Purchase EBJ's 2011 Water/Wastewater Industry edition (Volume XXIV, Number 10, 18,900 words, 8 charts) for $150