Engineering Inc. - November/December 2007 - 10

market watch Water Markets Represent a World of Opportunity By Joe Salimando T he drinking water and wastewater market is heating up, and engineers are poised to take advantage. Consider a survey by the Environmental Financial Consulting Group, which showed that for 192 large engineering/construction firms, 17 percent of their $48 billion in combined 2006 gross revenue was derived from water and wastewater segments. Demand for water and wastewater infrastructure continues to grow. Here are some reasons why: n Past funding for water infrastructure in the United States and abroad has been woefully inadequate. Current systems are in desperate need of upgrade, and the funds for clean water across the board continue to increase (see Figure 1). n The same conditions that contribute to global warming also are contributing to worsening drought conditions worldwide. n More nations are focusing attention— and money, especially in China—on new water infrastructure. n The U.S. Congress and several state legislatures, which have underfunded water infrastructure for years, now recognize that action and money are needed on water issues. Worldwide Situation: Dreadful Unfortunately, access to clean water is increasingly hard to come by. Consider this from Investors Chronicle, a U.K.-based publication: “Unless something is done to improve the way water is managed, twice the world’s current water consumption may be needed by 2050 to feed a global population of some 9 billion people.” U.S. Snapshot: More Effort Needed Consulting firm FMI Corp. estimated the U.S. water supply, sewage and wastewater treatment construction market would increase by 7 percent to $34 billion in 2007. It predicts an additional 7 percent gain in 2008 and a total construction market of $43.6 billion in 2011. Construction for the sewage and waste disposal segment is estimated to make up roughly 60 percent of the annual totals. At a March conference, the U.S. Environmental Protection Agency restated its projected funding shortfall for U.S. clean water infrastructure projects from $300 billion to $500 billion over the coming 20 years. As concerns over domestic terrorism mount, engineering firms also are seeing new opportunities in water supply security and plant protection. In the most recent study published by industry analysis firm ZweigWhite, nearly two-thirds of officials (65 percent) representing municipal water and wastewater systems for the 100 largest metropolitan areas in the country said they anticipated contracting with design or construction firms to assist in projects directly related to homeland security. U.S. facility upgrades and renovations are another growth area, according to ZweigWhite. Nearly three-quarters (73 percent) of survey respondents reported a need for design or construction services for facilities renovations between 2003 and 2006. What’s more, ZweigWhite projects U.S. water and wastewater facilities will require upwards of $1 trillion in upgrades and renovations over the next 20 years. Opportunities Worldwide But it isn’t just the U.S. market that’s heating up; opportunities abound on the world stage, too. According to Growing Markets for Water and Wastewater Technologies, a recent report from BCC Research, a global market analysis and research firm that has provided information on emerging markets to the business community for more than 35 years, the top five global growth markets for water and wastewater projects are China, India, Mexico, Egypt and Australia. Analysis of how many of the world’s 6.3 billion residents have access to clean water presents a troubling picture. According to the United Nations’ 2006 Human Development Report, more than 1 billion people lack access to clean water, amounting to almost one-sixth of the world’s population. On the flip side, what happens when clean water is available? According to WaterAid, an international nonprofit organization dedicated to improving water quality in impoverished nations, access to clean water drastically reduces instances of childhood disease, improves treatment options for AIDS and other conditions in impoverished nations and contributes to higher levels of education. 10 eNGINeerING INc. November / December 2007 FigUrE 1: Total Federal Spending for infrastructure, 1956—2006 6000 5000 (Millions of nominal dollars) 4000 3000 2000 Water Resources (a) 1000 Water Supply and Wastewater Treatment 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 0 1956 Source: Congressional Budget Office

Engineering Inc. - November/December 2007

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