In general, outlook for this industry is good and overall CapEx growth is likely to be positive and sustainable in the long run. Due to the essential nature of the industry, it is less volatile than many others. Growth rates of up to 20 to 30 percent may be expected in emerging markets, especially in China and India where the state is heavily investing and is expected to do so for the foreseeable future. Although a significant percentage of the water and wastewater infrastructure in the established economies (particularly in the US) is due for upgrading and/or replacement, CapEx investment will be relatively stable. Due to municipal budgetary constraints, many future projects are likely to use a public-private partnership model. ARC covers top technology trends in the Water and Wastewater industries on an ongoing basis. Please visit Technology Evaluation and Selection Guides page for recent ARC research reports.
Water and Wastewater Industry Overview
UN statistics state that in 2014, 54 per cent of the world?s population lived in urban areas, a proportion that is expected to increase to 66 per cent by 2050. Furthermore, 1.8 billion people in the world still do not have access to clean water and 2.4 billion people lack access to basic sanitation, although these numbers have decreased substantially in recent decades. Emerging economies typically invest first in water and then in wastewater technologies. The challenge to keep pace with growing economy and urban population, especially in so called mega cities (those with more than 10 million inhabitants). In addition, there are still large areas in emerging and developing economies where inhabitants have no access to water, posing a threat to social peace.
There is another main difference between developed economies and emerging markets: developed economies often have a decentralized market, where state-owned, private, or semi-private companies are the main players. In emerging markets, the main target is always the government or a state-owned company, which typically is responsible for a larger area.
The biggest markets, China and India, both struggle to keep up with growing urbanization and will have to provide clean drinking water and make sure wastewater is properly treated. Monitoring and managing industrial wastewater and supplying water and wastewater treatment facilities in their vast rural areas represent additional challenges for both countries.