Total investment in U.S. municipal water and sewer pipes by material type from 2017 to 2026. Image credit: Bluefield Research
With concerns about the municipal water infrastructure in the United States (U.S.) rising, pipe and hardware companies are poised to benefit from the forecasted US$300 billion capital expenditure over the coming ten years, according to Bluefield Research’s new published report, U.S. Municipal Pipe Markets: Trends, Opportunities and a Changing Competitive Landscape in Water.
Bluefield has projected that between 2017 and 2026, new and replaced pipe and hardware infrastructure will account for over 57 per cent of expenditure by municipal utilities.
“The public does not want to think, or even know, about the 1.6 million miles (2.57 million kilometres) of pipes underground, but hundreds of thousands of water main breaks and lead-tainted water have begun to put a spotlight on this historically overlooked sector,” Reese Tisdale, President of Bluefield Research, commented. “In fact, the average age of water pipes continues to climb – from 25 years in 1970 to 45 years in 2020 – largely because of underinvestment.”
While municipal demand for pipe solutions is anticipated to climb, materials used in the pipe industry for water and wastewater is also set for change. New spending trends on pipes are revealing utilities and engineering firms’ preference for plastic pipes made of polyvinyl chloride (PVC) and high-density polyethylene (HDPE), which will translate into US$97 billion of the forecasted ten-year total, largely due to cost-efficiency.
With the changing pipe materials come alterations to the supply chain. Presently, companies are opening their portfolios to include innovative solutions and new upcoming pipe technologies, and a few have even entered new regions to capitalise on the momentous growth. According to Bluefield, JM Eagle, North American Pipe, and Pipelife, already leading players and ranked among the Top 10 suppliers by revenue in the industry, are in place for growth.
Simultaneously, positive signs pointing to burgeoning demand have resulted in a flurry of merger and acquisition activity. Since the beginning of 2016, Bluefield has tracked 28 acquisitions of pipe companies, coming to a total of US$6.3 billion. Of the companies tracked, Forterra – though a newcomer – has proved to be the most dynamic, having inked nine deals in the last three years and making it to just outside of the top 10 leaders in the industry.
Already, the large scale of investment going into upgrading and improving pipe networks has pushed the more innovative, smarter solutions to maintain their place ahead of the rising costs. More than US$2.7 billion will be allocated to asset condition assessment and pipeline monitoring, while operating expenditures on water leakage management will come up to US$1 billion alone over the next decade.
“Replacing water pipes is extremely labour intensive and costly, so utilities will increasingly be forced to look for ways to squeeze costs with more cost-effective materials, installation techniques, such as trenchless technologies, and network analysis,” Tisdale added. “Certainly adoption will take time but innovative solutions are in front of them.”
Source: Bluefield Research