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 3,300 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.

Water Consumption Falls

Conservation efforts and concern for the environment have succeeded in reducing water consumption in the US.

Industry size & Structure

The average water supply and sewage treatment company employs 11-16 workers and generates $4 million in annual revenue.

    • The water supply and irrigation system industry consists of about 3,300 firms that employ about 38,600 workers and generate about $12 billion annually. The sewage treatment industry consists of about 340 companies that employ about 5,400 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Oct 28, 2022 - Funding Awarded to Repair Water Infrastructure
                                  • In September 2022, the EPA awarded more than $1.1 billion in capitalization grants through the State Revolving Funds (SRFs) under the Bipartisan Infrastructure Law to 18 states for water infrastructure improvements, according to WaterWorld Magazine. The Bipartisan Infrastructure Law allocates more than $50 billion to the EPA for repairing essential water infrastructure. The funds are to be used for repairing aging infrastructure, replacing lead service lines, cleaning up contaminants, and helping communities be more resilient to floods and climate impact. Nearly half of the funding through the SRFs must be grants or principal forgiveness loans that remove investment barriers in essential water infrastructure in underserved communities. States will continue to be awarded funds over the next four years.
                                  • High interest rates, continued supply chain constraints, and elevated housing prices pushed home builder sentiment lower in October, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell eight points to 38 in October 2022 from 46 in September, marking the tenth consecutive monthly decline. Any HMI reading over 50 indicates more builders see conditions as good than poor. In mid-September, mortgage rates rose to about 6%, reaching their highest level since 2008. Demand for new homes has fallen as higher interest rates have made housing less affordable.
                                  • After years of drought resulting from climate change, California and six other states are working to hammer out a deal to significantly reduce their water use – by as much as 40% - before the US Interior Department’s Bureau of Reclamation steps in and does it for them, according to ProPublica. In mid-August, the states missed the Bureau of Reclamation’s deadline to work out a plan to reduce water use from dangerously low reservoirs on the Colorado River, including Lake Mead. California’s Imperial Valley, which is home to huge tracts of farmland, is likely to be a target for drastic cuts in water use.
                                  • The Centers for Disease Control and Prevention (CDC) set up a wastewater surveillance system in September 2020 and now funds sewage monitoring efforts in all 50 states, according to The New York Times. Wastewater surveillance can help determine which variants are dominant in a community, which can help doctors make critical treatment decisions. Public health experts say the US needs to make more investments to expand and better coordinate wastewater surveillance to gather more data and share it more quickly. Wastewater testing is also being used to track the spread of monkeypox. In August, New York City health officials announced they had detected the polio virus in wastewater samples, suggesting polio was likely circulating in the city.
                                  Get A Demo

                                  Vertical IQ’s Industry Intelligence Platform

                                  See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                  Build valuable, lasting relationships by having smarter conversations -
                                  check out Vertical IQ today.

                                  Request A Demo