CAPEX forecast for U.S. water infrastructure improvements stands at US$683 billion by 2027

Capital expenditures (CAPEX) for municipal water, wastewater, and stormwater infrastructure in the United States (U.S.) will exceed US$683 billion over the next decade, according to new forecasts from Bluefield Research.
“The public’s growing concerns about U.S. water infrastructure are real and increasingly reflected in utility planning documents,” Erin Bonney Casey, Research Director for Bluefield Research, said. “Our analysis of utility capital improvement plans in 100 cities demonstrates the wide range of capital needs across the water industry, from manhole covers and fire hydrants to information technologies.”

Each system across the U.S. faces unique challenges. Per capita spend by utility for the ten-year forecast period ranges from a low of US$157 in Riverside County, California to a high of US$11,117 in Miami-Dade County. The average across the utilities analysed is US$2,621. High per capita expenditure is often related to a specific driver, including environmental consent decrees to remediate stormwater overflows and acute water quality challenges in cities like Jackson, Mississippi or Pittsburgh, Pennsylvania.

With leakage, a key issue plaguing the water industry, investment in pipes continues to dominate water infrastructure spend. Almost two trillion gallons (7.57 trillion litres) of water per year are lost to leaks, about 15 per cent of the total drinking water treated in the U.S.

The distribution and collection networks for water and wastewater – pipes, pumps, tanks, valves – dominate the forecast, surpassing US$375 billion of the ten-year total. Pipes represent 75 per cent of this, of which more than 60 per cent is dedicated to rehabilitation of existing networks.
“The underground pipe networks for water, wastewater, and stormwater in the U.S. exceed 1.6 million miles (2.57 million kilometres), which is enough for almost three roundtrips to the moon. It is no wonder that this is where the dollars are going and will continue to go,” Bonney Casey added. “The longer-term challenge is keeping pace financially with network deterioration.”


New Solutions Emerge in a Mature Market Sector
Bluefield has also identified new areas of growth for more advanced solutions to address chronic water infrastructure issues. CAPEX for information technology inspired segments like smart water will contribute more than US$16 billion. While metering hardware represents the lion’s share of this spend, utilities are now investing in “Big Data” solutions, as the water sector looks for more efficient ways to map, analyse, rehabilitate, and operate aging water and wastewater systems.

Utilities are also prioritising resiliency with their capital allocations. In the wake of concerns about large storm events, increasing attention has been devoted to wastewater and stormwater impacts on the environment. This is driving an increase in combined CAPEX from US$31.8 billion in 2018 to US$35.3 billion in 2027, including funding for new approaches, such as green infrastructure.

“It is abundantly clear that water infrastructure needs are growing and utilities are investing accordingly,” Bonney Casey concluded. “Of the 52 utilities we analysed in both our 2016 and 2018 forecasts, 32 show an increase in capital improvement planning budgets growth, with an average growth of 47 per cent. What is most notable, though, is the areas in which utilities are now choosing to focus their dollars: Whether it be resiliency, data and analytics, green infrastructure, stormwater overflows – the needs are many and they can vary by region, and utility.”