From The Editor | December 5, 2016

The Non-Trumpian Reality Of Water Infrastructure Under A New President


By Bill King

There’s an awful lot of conjecture right now about President-Elect Trump’s … well … everything really. In relation to the water industry, Bluefield Research recently summarized the impact of Trump’s American Energy and Infrastructure Act, in its report Trump Contract Clashes with Water Infrastructure Reality. Water Online analyzed the report findings here.

With Trump on a “victory tour,” the Green Party filing motions for recounts in three States and a contentious battle between Clinton and Trump aides on Thursday at Harvard University’s post-election campaign review, you could be forgiven for wondering if we’ll ever climb out of the political sump pit again.

In an effort to avoid the political maelstrom, I thought I’d share with you some very non-political findings that Boenning & Scattergood recently published in their November 2016 Aquanomics report. Let’s assume for a minute that the President of the United States doesn’t have much affect on the day-to-day business of treating wastewater and supplying drinking water to our citizenry and look at some of the real business indicators affecting our market going into 2017.

As Boenning & Scattergood point out, municipal bond issuance has hit a multi-year high, topping $50 billion in October for the first time since 2010 and up from $42.5B in September. Another municipal channel indicator highlights the aggressive hiring spree that water and wastewater system operators have been on since early 2015. As reported by the U.S. Bureau of Labor Statistics, net employment in the sector has risen from 47,000 in March 2015 to 54,000 in September 2016, a 15% increase that significantly outpaces the economy in general. Boenning & Scattergood would suggest that increasing payrolls is a positive sign that utilities are hiring in part to staff-up ahead of infrastructure improvements. And with water prices continuing to outpace CPI inflation, the indication is that 2017 will be a strong year for projects in the water and wastewater markets.

Construction market data also suggests a good year for water and wastewater manufacturers involved in new construction infrastructure. U.S. housing starts have been trending up from 650,000 in September 2011 to 1,000,000 in September 2016. And residential permits are following a similar trajectory.

And although industrial demand remains weak after two years of reduced capex in the energy sector, Boenning & Scattergood point to a number of stats showing that industrial production has stabilized and will likely improve in the months ahead.

All this suggests that despite the uncertainty of a new administration coming into office, water and wastewater market fundamentals are in place for a solid year. The big question for you as a manufacturer in the water industry shouldn’t relate to what Trump will or won’t do when he is sworn into office on January 20th. It’s far more fundamental than that. Right now you need to be asking yourself how you are going to elevate your brand in 2017 to take advantage of the improving water and wastewater economy, regardless of who is sitting in the White House.