The water industry faces challenges such as failing infrastructure, recessionary fears, high material prices, and a retiring workforce. However, with a growing focus on infrastructure, drinking water quality, and sustainability, water is in the spotlight more than ever. Despite these challenges, they will drive water market opportunities in the future.

Federal Funding Dedicated Specifically to Water

The U.S. federal government is investing in water infrastructure through the Infrastructure Investment and Jobs Act (IIJA), which allocates $55 billion for drinking water, wastewater, and stormwater infrastructure through 2026. The legislation focuses on lead service line replacement, PFAS remediation, water reuse, Indian water rights, and investments in water technology innovation. As of April 2023, total announced funding for water infrastructure projects reached $24.1 billion, indicating significant growth potential in the water sector.

New Drinking Water Regulations Drive Opportunities for Water Providers

PFAS, or "forever chemicals," are causing significant contamination in drinking water systems, with chemical companies like 3M, DuPont, Corteva, Solvay, and Chemours settling over $14.1 billion. 45 states have legislated policies to limit PFAS contamination, with 12 states implementing drinking water standards and the EPA proposing federal MCLs. Bluefield predicts $13.5 billion in drinking water remediation technology will be spent from 2023-2030 in the US.

A Focus on Climate is Driving Water Investment Decisions

Corporations are recognizing the impact of water on their bottom lines and adjusting their strategies accordingly. Companies like Nestlé and Amazon are recycling wastewater and returning more water than used from water-intensive data centers. This proactive approach will help water utilities meet supply pressure. Sustainability targets and investments in water management are signaling a growing focus on water through M&A and partnership opportunities.

The Bottom Line

The mature water sector is an attractive opportunity for companies looking for less volatility. Investors and Wall Street are now paying attention. Let’s seize on this time when water is in the spotlight to address these industry challenges and capitalize on water market opportunities. The challenges are many, but the time for water is now.