SAN DIEGO, CA, DECEMBER 9, 2016 --The U.S. Water Industry grew 3% in 2015, generating $160 billion in revenues, according to Environmental Business Journal (EBJ), a publication of Environmental Business International Inc. (EBI, San Diego, Calif.)
EBI tracks 10 sub-segments under its definition of the U.S. Water industry. The journal's latest annual review showed the water instruments & information segment leading growth and expanding revenues by 5.8% to $1.45 billion in 2015.
"Growth is being driven by increasingly comprehensive regulatory controls and the regulation of new contaminants, both of which mean testing and monitoring requirements are continuing to expand," said EBJ Editor-in-Chief Grant Ferrier. "Even in the most highly regulated countries like the United States, water pollution problems continue to grow as new contaminants are unleashed and discovered."
Water and wastewater consulting & design engineering was the second fastest growing water segment tracked by EBJ last year, up 3.5%. Environmental consulting and engineering (C&E) firms offer water and wastewater analysis, design, construction-management, compliance, operations & maintenance and other servicesthat added up to revenues of $10.8 billion in the United States in 2015, or 36% of U.S. environmental C&E revenues.
CH2M, Tetra Tech, AECOM, MWH Global, Black & Veatch and HDR led EBJ's ranking of top environmental C&E firms active in water and wastewater in 2015.
The two largest segments in the Water Industry -- wastewater treatment works and water utilities -- together totaled almost two thirds of industry revenues in the form of fees paid to municipal or investor owned utilities for drinking water and sewage treatment services. These mature segments maintained growth of 2-3% in 2015 as rates increases outweighed a modest reduction in water usage in many areas, according to EBJ, which has been tracking the drinking water and wastewater segments since 1988.
Water recycling and reuse was identified as one of the most robust sectors in the water business in 2015: "Water recycling initiatives, from residences to municipal or industrial installations, are rapidly growing and offer great potential to extend the water resource base," noted Ferrier.
Growing strategic interest in the global water industry has led to strong merger and acquisition (M&A) activity and consolidation among key U.S. suppliers and vendors.
"Although the intensity of M&A interest dipped during the Great Recession, deal activity and valuation levels have seen a resurgence due to the scale of water problems globally and emerging opportunities for innovative products and solutions; both strategic and financial buyers continue to compete to invest in water equipment and service companies," said Ferrier.
The biggest deal of 2015 was in the Water Equipment segment, represented by Danaher's acquisition of publicly traded Pall Corporation in a deal valued at almost $13 billion.
In the Environmental C&E segment, Stantec's acquisition of MWH Global dramatically shifted Stantec's business mix towards the water and wastewater sector, added smart water software, and increased the company's presence in Asian markets. The transaction was valued at about $800 million.
In the global monitoring and instrumentation market, Honeywell agreed to buy Melrose Industries Plc's Elster unit for about $5 billion.
"With regulatory controls over water and wastewater becoming stronger in almost every region of the world, and public spending on water infrastructure needed on a huge scale, investors are anticipating steady growth ahead for the water industry," Ferrier concluded.
About EBI
Since 1988, the mission of Environmental Business International (EBI) has been to serve the business development needs of environmental companies by providing high-quality strategic information in the form of business newsletters, in-depth reports, and contract research for government and the private sector. EBI serves all segments of the environmental industry and climate change industry worldwide. Through editorial research, proprietary industry surveys, and data analysis, EBI identifies and tracks these evolving markets, aggregating company performance, estimating market size, and forecasting growth within the context of business and regulatory trends. EBI also hosts the annual Environmental Industry Summit, now in its 15th year, a meeting for senior exeuctives in water/wastewater, remediation, consulting & engineering, hazardous waste, air pollution control, and other key environmental and climate change industry segments. The summit features state-of-the-industry presentations and key business and regulatory issues affecting the environmental and climate change industries.
EBI founded EnvironmentalBusiness Journal in 1988, giving shape to the Environmental Industry and providing strategic information and market forecasts for executives involved in 14 environmental business segments. The EBI segmentation and quantification of the Environmental Industry was adopted by the U.S. Department of Commerce's Statistical Abstract, OECD, and many other government and private sources.
