Water: The World's Biggest Natural Resource Shortage

Do a Google search on the availability of drinkable water and you’ll unearth dozens of reports showing the world’s biggest natural resource shortage isn’t oil but water. And unlike oil – where there are numerous real world alternatives – there aren’t any substitutes for nature’s most essential nectar.

Though not a problem in the U.S., did you know the world’s leading cause of death is still disease caused by bad drinking water?

Within the U.S., much of the nation’s water infrastructure was built years ago – in some cases back in the time of the Great Depression. Today, with aging water systems in dire need of repair, nearly 40% of the entire U.S. drinking water supply is lost every year due to leakage. And that’s up from 15% just ten years ago.

To get a close-up look at this issue, ChangeWave Research recently conducted a survey of water industry experts – focusing on the sectors and companies that have the most to win or lose in 2007. A total of 357 ChangeWave Alliance members participated – including 122 who work for companies directly involved in the water industry.

Growth Projections

In one of the survey's key findings, four-in-five industry respondents (80%) project an increase in water project spending over the next 12 months – with the greatest growth occurring in Asia and North America. Only 2% think spending will decrease.

But where is this spending going?

Question Asked: Which of the following water sectors do you think will attract the most public/private spending over the next 12-24 months? (Choose No More Than Two)

By a wide margin, industry respondents see Water Infrastructure Repair and Replacement attracting the most spending over the next two years, followed by Wastewater Treatment.

We next looked at which companies are best positioned in the market.

Which of the following companies involved with water infrastructure do you think are well positioned in the marketplace over the next 12 months? (Choose No More Than Three)

Best Positioned Companies

Along with industry leader General Electric (GE), two other companies – Insituform (INSU) and Fluor (FLR) – were also cited as the most well-positioned by industry respondents.
Note that while GE was seen as best positioned, given its immense size and diversified structure, any water business it gets for the foreseeable future will only have a small effect on its bottom line.

Based upon our survey results, the best pure play appears to be Insituform – a leading provider of trenchless pipeline technology.

According to Insituform, it’s proprietary processes rehabilitate, replace, maintain, and install underground pipes worldwide with a long-term, less disruptive solution than traditional pipeline technology.

Alliance member CHA0069 finds the company to be the “market leader in ‘know how,’” while member SXB11530 cites Insituform's “Geographical position and good experience in the field.”
Regarding Insituform’s growth prospects, member TEV04496 states: “A lot of U.S. pipes are going to need replacing and water is becoming a huge growth area.”

What to Watch For in 2007

Here's what the Alliance has to say about the most important water-related ChangeQuakes for 2007.

According to our 10,000 member network, clean water demand surpassing supply is the top Quake facing the water industry for the coming year.

Now that we have established the above watermarks, the Alliance will continue to keep a close eye on industry trends for 2007.

Remember, with the vast majority of the industry saying spending on water projects will increase over the next year, one thing appears certain – there will be big winners and losers here in 2007.

Note: Jim Woods co-wrote this article.
.............................................................................................

This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

Comments

[jbringer]

This survey and article is right on target. The American Society of Civil Engineers actually says that 6 billion gallons of water are lost every day in the U.S. due to leaking water infrastructure. It's higher than that in other parts of the world.

To put the health aspect in perspective, 4 to 5 times as many children die from water-related illnesses each year than die from HIV/AIDS. Money will have to be spent to fix these problems.