Water Supply and Sewage Treatment
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 3,900 water supply and irrigation system companies in the US store, pump, treat, and deliver water to customers. The 340 sewage treatment companies operate sewer systems or sewage treatment facilities that collect, treat, transport, and recycle wastewater. The sale of water accounts for the majority of industry revenue. Large firms may offer both water supply and sewage treatment services. Some firms also offer other types of utilities, such as electric power or gas.
Aging Infrastructure and Funding Gap
The water and wastewater infrastructure in the US is aging, and many systems are nearing the end of their useful life and in desperate need of modernization and replacement.
Rising Rates
Despite public pressure to keep rates low, the water supply and sewage treatment industry has been able to raise rates consistently with healthy increases over time.
Industry size & Structure
The average water supply and sewage treatment company employs 11-18 workers and generates $4 million in annual revenue.
- The water supply and irrigation system industry consists of about 3,600 firms that employ about 39,500 workers and generate about $12 billion annually. The sewage treatment industry consists of about 330 companies that employ about 5,800 workers and generate $1.5 billion annually.
- The industries appear concentrated; the top 50 companies account for between 75% and 90% of industry revenue. However, government ownership (at the local level) skews the concentration percentage, and both the water supply and sewage treatment industries are more fragmented than Census numbers reveal.
- The majority of community water systems and wastewater treatment systems are government-owned. Just over 15% of Americans receive water through investor-owned water supply utilities.
- Large government-owned systems include the New York City and Washington DC systems. Large investor-owned firms include American Water, Aqua America, and United Water (Suez Environment).
- According to the EPA, approximately 90% of the US population obtains its water from community water systems and 10% obtains water from private wells. The US has 52,000 community water systems, of which 91% serve less than 10,000 customers. The US has 16,000 wastewater facilities that serve 80% of the population.
Industry Forecast
Water Supply and Sewage Treatment Industry Growth
Recent Developments
Mar 24, 2025 - EPA to Revise Waters of the United States Rule
- In March 2025, the EPA announced that it would work with the Army Corps of Engineers to review the definition of “waters of the United States” (WOTUS) to reduce red tape, simplify compliance, and reduce costs. The revision of WOTUS will be informed by the Supreme Court’s 2023 decision in Sackett v. Environmental Protection Agency, which ruled that the Clean Water Act’s definition of “waters” only include relatively permanent, standing or continuously flowing bodies of water forming streams, oceans, rivers, and lakes. The Trump administration EPA believes the current WOTUS definition is too broad and places an undue burden on farmers, landowners, and businesses by requiring costly permits before starting projects.
- North American construction and engineering spending for water and wastewater projects is expected to rise for the next several years, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. Water supply project spending is expected to rise by 9% in 2025 amid necessary investments in water infrastructure. In a 2023 estimate, the EPA said the US will need to spend $625 billion over the next two decades to improve drinking water infrastructure. About two-thirds of that investment will be required to repair transmission and distribution networks. The EPA also estimates that replacing lead pipes will cost between $50 billion and $80 billion, with 9 million homes affected. Water supply spending growth is expected to moderate to 5% in 2026 and 1% in 2027 and 2028. Sewage and waste disposal construction and engineering spending is projected to rise by 6% in 2025. Key focus areas include hardening infrastructure in the face of severe weather events such as flash floods and hurricanes, additional water treatment plants, conveyance systems, recycled water distribution, and desalination. Sewage and waste disposal project spending is forecast to grow 4% in 2026, 1% in 2027, and 3% in 2028.
- More communities are considering bans on adding fluoride to drinking water, according to The Wall Street Journal. Utah’s legislature recently passed a bill to ban fluoride in the state, and the governor has said he will sign it. If the bill becomes law, Utah will be the first state to ban fluoride. Opponents of fluoride argue it’s unnecessary, given widespread access to toothpaste and mouthwashes that contain fluoride. Others suggest the chemical poses health risks, citing recent research that fluoride in elevated exposures was associated with lower IQ in children. However, the higher exposures were twice the recommended amount for US drinking water. Advocates for fluoride suggest it’s a valuable tool for public health, especially for vulnerable communities. The EPA and the Centers for Disease Control and Prevention say fluoride is safe when used at recommended amounts. Nearly two-thirds of people in the US had fluoridated tap water in 2022.
- In a highly anticipated report released in mid-January, The EPA warned that two types of PFAS chemicals in biosolids can pose a health threat at levels as low as 1 part per billion, according to Waste Dive. The EPA found that two perfluoroalkyl substances (PFOA and PFOS) can leach from biosolids - or sewage sludge - if applied as a fertilizer, deposited in landfills, or incinerated. The EPA study focused on land application of biosolids because of their potential impact on water and food supplies. While the EPA’s findings do not involve an enforcement element, the agency recommends removing PFAS upstream from water treatment facilities.
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