The general consensus is that the water/wastewater industry grew by about 4% in 2008 and should grow about the same in 2009, he said. This is despite lessened tapping fees and other revenue drops, less water being used and rising costs. While some cancellations and deferrals of projects have occurred, the trend has not been rampant and has been very specific to geography.

“One reason the market stays so good is the tremendous backlog of work,” Decker said. The nation is now in the process of working off that backlog, and bidding has become extremely aggressive, he added.

“One of the enablers [for that aggressive bidding] is that the prices of materials is holding steady or dropping slightly so [bidders] can sharpen that pencil,” he said.

Add to that fact the reality of need—failing infrastructure and court-ordered consent judgments are pushing utilities forward, for example—and the picture for the industry, while not as bright as the peak in 2005, looks steady.

While wastewater construction is still outpacing drinking water construction, recent research figures from Engineering News Record showed growth in water engineering is far outpacing growth in engineering for wastewater.

That should translate in coming years into increased need for drinking water equipment and construction, he said.

While the stimulus package may affect the industry somewhat (more than $6 million is slated for state revolving funds, for example), the package was put together to get people working and the economy moving. Because of that, the types of projects that will get some funding are those that can meet the very tight design time frames involved. (A quarter of the money that goes into revolving funds has already been distributed, he pointed out).

Fortunately, some agencies and utilities already had big projects in the works, because otherwise, the stimulus package would affect mostly just smaller projects.

A few of the key areas in this industry to keep on eye on include:

• The bond and credit markets. Decker said these markets must stabilize before the industry can see significant project growth. He said to watch private dollars and pointed to a new Citigroup program providing loans to municipalities for financing infrastructure projects.
• New opportunities. The world currently has only a 90-year supply of phosphorous, and while methods for removing it from wastewater exist, ways to process the results have not been refined. Desalination remains one of the hottest new segments in the industry. Decker said projects in this area are starting to break loose and that the next 1 to 5 years will see a number of U.S. projects built.
• Piping. Decker pointed out that in the U.S., we lose 15% to 17% of drinking water through bad pipes (leaks) and in the world, that number is 26%. Nearly half of the pipes that currently exist will reach their life expectancy by the year 2020, he pointed out.

FORECAST: The market for water/wastewater will not contract in 2009 and will see a 4% growth overall. There also will be no contraction in 2010 because of sufficient demand and funding mechanisms, as well as a steady backlog of projects.

U.S. POWER
An Industry Slowly on the Rebound

The U.S. power industry is currently faced with a myriad of challenges, including dealing with the increased cost of capital and shortened loan terms, environmental and regulatory uncertainty, and a drop in overall electricity consumption. However, longer-term market fundamentals point to an improving market picture for industry players, including the valve and pump industry, according to Keith Small, senior marketing manager & proposals of Black & Veatch’s Energy business.

Small said the power generation industry is slowly beginning its rebound following a “trough.” Many power providers are taking steps to preserve liquidity and maintain their overall financial health, he said, and the result has been an increase of plant upgrade and efficiency improvement projects to enhance existing operating fleets.

Small also shared how clients’ focus on sustainability (economic, environmental and community benefits) has exacerbated the power generator’s conundrum—“it’s not just about adding additional megawatts to the grid, but rather what kind of megawatts and at what cost,” Small said.

Power generation technology deployment is changing, he said. “Coal has a difficult road ahead, at least in the short-term,” Small said. Environmental and political opposition have intensified and new coal plants in the U.S. going forward will likely need to be carbon capture ready.

Meanwhile, “Renewable energy is the growth market today,” Small said, as clients embrace alternative fuel sources to meet renewable portfolio standard (RPS) mandates (requiring a percentage of electricity to come from renewable sources). Wind has peaked, but it will rebound; solar is expanding, and interest in biomass (co-firing and new build) is growing.