There’s a rebound occurring in water project spending over the next 12 months — largely driven by the U.S. government’s economic stimulus program.
These are the results of a July ChangeWave survey of 101 respondents working for companies in the water industry.
Top Winners and Losers
Water Infrastructure Repair and Replacement remains the top water industry sector — with 71% of industry respondents saying it will attract the Most Spending over the next two years and only 8% the Least Spending (Net Difference Score = +63).
Wastewater Treatment (+27) is also seen as a winner.
On the downside, Desalination (-29) and Water Metering (-23) are expected to attract the least spending.
Which Companies Will Benefit Most?
Water industry respondents were also asked a series of questions about best positioned companies within specific water sectors. Here are companies seen as having the most momentum:
| Water Industry Sector | Companies With Most Momentum |
| (1) Water Infrastructure | Veolia Environment (VE), Tetra Tech (TTEK) |
| (2) Water Filtration | Siemens (SI) |
| (3) Engingeering & Construction Services/Consulting | Tetra Tech (TTEK) |
| (4) Equipment | Flowserve (FLS) |
| (5) Utilities | Veolia Environment (VE) |
Two Standout Water Companies
Two companies stand out from the pack:
- Veolia, an environmental services company, operates a water division that provides water and wastewater services for municipalities and industrial clients. Respondent PLS40326 cites Veolia’s “proven presence and performance worldwide,” while POT05073 adds they’re “best positioned for expansion.”
- Tetra Tech provides resource management and sustainable infrastructure services to government agencies and commercial customers. As WAT1273 puts it, “Tetra Tech seems to be maintaining a good backlog and is involved in managing public water systems for municipalities. Budget cuts at these municipalities will lead to increased business for Tetra Tech, as many of their services are contracted out.”
Overall Industry Trends — Water Spending Set To Increase
Better than two-thirds of respondents (68%) report spending on water projects will increase over the next 12 months — double ChangeWave’s previous survey in October 2008. Just 6% say spending will decrease — a considerable 22-pt improvement.
At the country level, respondents project the U.S. (43%) will experience the biggest increase in spending over the next 12 months — surpassing China (38%) in this regard.
As respondent EEP05829 sees it, the U.S. will enjoy the biggest spending increases because of “stimulus funds… and because there is a real need to get infrastructure repaired, rehabbed, and replaced.”
PLS40326 believes that demand in China is “…inelastic and money must be spent,” while KEN96574 points out that China has to “…meet its drinking water needs because of demographic shifts and to control pollution.”
A Closer Look at U.S. Water Project Spending
Regarding the U.S., 80% of respondents see Federal spending increasing over the next 12 months — triple the amount from October 2008. State governments (48%) are also set to make big gains comparatively — local governments (37%) less so.
The reason for the surge in U.S. government spending: The economic stimulus program, of course — which includes an estimated $6 Billion allocated to water projects.
Note that when we asked respondents about the impact the U.S. stimulus program will have over the next year, 30% said it will cause a Significant Increase in water project spending and 61% a Slight Increase.
Andy Golub co-wrote this article.
