Capital expenditure (CAPEX) on pipe infrastructure for municipal water and wastewater utilities in the U.S. and Canada is projected to reach US$117.0 billion between 2025 and 2035, according to a new report from Bluefield Research. Annual spending is expected to rise from US$7.9 billion in 2025 to US$14.1 billion by 2035—nearly double current levels. The forecast highlights a focus on water distribution and wastewater collection networks as utilities address water losses, rising material costs, and uncertain funding.
Over the next decade, rehabilitation of existing pipe networks is projected to grow at a compound annual growth rate (CAGR) of 15.10%, significantly outpacing pipe replacement (4.93%) and new installations (4.35%). This focus on rehabilitation reflects efforts to extend the lifespan of current assets while limiting immediate capital outlays. However, new installations are still expected to represent the largest portion of total expenditure, estimated at US$68.3 billion during the period.
“Utilities are being forced to rethink how they invest in their underground systems,” said Charlie Suse, senior analyst at Bluefield Research. “Amid rising material costs and national water loss rates exceeding 17%, there’s a growing emphasis on smarter rehabilitation—approaches that extend asset life while minimising operational downtime.”
Wastewater systems—historically underfunded relative to drinking water networks—are emerging as a new focus area. Investment in wastewater pipes is forecast to grow at a CAGR of 7.15%, compared with 5.18% for drinking water pipes. This reflects the ageing of sewer infrastructure, urban and suburban expansion, and a shift from private septic systems to centralised municipal networks.
Regional Growth Driven by Housing and Population Trends
Investment patterns show considerable variation across North America, shaped by housing development and demographic shifts. Arizona is forecast to lead growth at 7.78%, followed by Ohio and Nova Scotia.
States such as Texas, California, and Florida—home to large populations and extensive linear infrastructure—are expected to account for around 30% of total projected pipe investment. North Carolina is also forecast to be among the top 10 markets for CAPEX.
Canada, meanwhile, recorded its highest population growth rate since 1957 between 2022 and 2023. From 2020 to 2022, more drinking water, wastewater, and stormwater pipes were installed than in any previous comparable period, supporting a forecast of US$8.12 billion in pipe CAPEX through 2035.
Material Choices Balance Cost and Performance
Across an existing network of 4.5 million miles of pipes, polyvinyl chloride (PVC) continues to gain market share in new installations, particularly in residential and suburban developments, due to its lower upfront cost and ease of handling. In high-growth regions such as the U.S. South and West, developers frequently opt for PVC, high-density polyethylene (HDPE), and polyethylene (PE) to reduce initial capital expenditure.
However, material selection remains regionally specific. While PVC is common in new developments, ductile iron is still preferred in older urban systems, where durability and resistance to breakage in crowded underground spaces are critical.
“Material selection is more than just price,” added Suse. “These decisions are shaped by the local environment, the utility’s experience with its existing pipe network, and the long-term objectives of the end user—whether a utility or a property developer.”
Planning Under Price Volatility
Bluefield identifies a new phase of price uncertainty in the U.S. pipe market. From 2014 to 2024, the market experienced three price phases: relative stability (2014–2020), sharp inflation (2020–2022), and short-term deflation (2022–2024). Looking ahead, supply chain challenges, fluctuating tariffs, and compliance with domestic procurement requirements such as the Build America, Buy America Act are expected to drive a fourth phase of volatility.
This new environment may lead to renewed price increases, delays, or even cancellations of projects, particularly if there are reductions in federal programmes such as State Revolving Funds, which support thousands of community water and wastewater systems across the U.S.
“Pipe infrastructure may be buried, but it’s rising to the top of mind for many stakeholders,” said Suse. “Utility decisions are not made in a vacuum—most are being asked to do more with less—and the choices they make over the next decade will define water infrastructure resilience and service reliability for utility customers moving forward.”
