Key Takeaways from ACE 2017: US Water Market Shifts

14 Jun 2017

Our team of water experts just got back from ACE 2017 Conference in Philadelphia –the single largest municipal water-focused conference in the U.S. Optimism was high this year, which is not always the case, as suppliers and service providers see market drivers (e.g. improved efficiencies, aging networks, internet of things) beginning to gain traction.

In addition to presenting on The Convergence of Water & Data (Free with Registration), the Bluefield team met with key decision-makers across the industry. Four key takeaways from the three-day event:

Despite the hype, hardware suppliers are cautiously patient.

Engineering firms across the industry are the busiest they have been in a long time. However, the money has yet to flow downstream to hardware suppliers. A lag in project development timelines – from feasibility to procurement– is part of the reason; another is expectations of a boost from the federal government which has failed to come to fruition. We forecast US$532 billion of municipal utility CAPEX over the next decade, which will rely on rising water & wastewater rates, a select number of PPPs, WIFIA, and state revolving funds. Any hope of an additional federal infrastructure stimulus is unlikely to arrive any time soon, if at all.

Exhibitors are smarter.

In contrast to years past, the tradeshow floor hosted a more than 52 data and analytics solutions providers– by our count– including Mueller, Trimble, Arad, Itron, Hydromodel Host, Optimatics, NJBSoft, Verizon, and Oracle, among others. Their presence and diversity demonstrates the scaling potential for smart water through partnerships and organic growth. It is still early for the sector, as smart water business models are tested by utility demand. Cybsecurity is an example of an issue water utility operators have not had to deal with to date and are not likely to budge until the unforeseen event (e.g. hacking, system failure) undermines public confidence.

Pick your pipe.

Municipal pipe networks are the target for the lion’s share of utility spending, totaling more than US$270 billion over the next 10 years, but there is an incremental shift underway. Ductile iron suppliers, which have demonstrated durability and preference by urban utilities over recent decades are facing headwinds. Tight municipal budgets are pushing decision-makers to consider alternative materials such as PVC and HDPE for new and rehabilitation projects. In some cases, established ductile iron and steel companies are venturing into new materials to address changing demands.

Water quality in the aftermath of Flint.

Water quality is on everyone’s mind and driving increased activity for companies like Ayyeka, Hach, Trimble, and S::CAN. This is a segment in which Bluefield has been increasing its focus, as utility customers are demanding improved reliability in the wake of Flint and Pittsburgh.

These are the types of key trends that we track our ongoing analysis of U.S. municipal water markets. Contact us to learn more about our insight services, data and analysis for purchase, and custom research offerings.