Water is Big Business

Post 11 of 12
Water is Big Business

The most widely used estimate of the size of the global water market over the last two years has been in the range of $360 billion, as shown in the chart below, with an annual growth rate of 4-5%, suggesting the market is currently in the range of $375 billion.

The most widely used estimate of the size of the global water market over the last two years has been in the range of $360 billion, as shown in the chart below, with an annual growth rate of 4-5%, suggesting the market is currently in the range of $375 billion. Within that amount, the key segments break down as follows:

50% of the total, or approximately $185 billion, is comprised of municipal utility services revenues an estimated 20-22%, or about $40 billion, is revenues from private sector utility operators while the remainder is provided by government entities, usually local municipal government, around the world. (While the private sector serves only an estimated 10-12% of the world’s population, their share of revenues are higher since they are charging full cost of service, rather than embedding it in the government cost base. This trend toward full-cost pricing of water is beginning to take hold in some municipal governments as well.) 26-27% , or $100 billion, comes from consulting, engineering, construction, operations and other services. 21-22%, or $80 billion, comes from the sale of equipment, technology, and treatment chemicals. 2-3%, or approximately $9 billion, is residential water treatment equipment.

Using these numbers, the size of the global private sector market available to investors would be about $229 billion, including private sector utility revenues, equipment, services, and the residential market.

A recent analysis by Global Water Intelligence, the leading industry journal, estimated a global market size of $316 billion, broken down as follows:

  • $18 billion – industrial capital expenditure
  • $13 billion – industrial operating expenditure
  • $78 billion – utility capital expenditure
  • $71 billion – utility operating expenditure, ex chemicals, energy, and labor
  • $23 billion – utility chemicals/consumables
  • $48 billion – utility energy expenditure
  • $65 billion – utility labor expenditure

This estimate suggests that the global market is about $203 billion, excluding energy and labor expenditures. Though it’s looking at the market a little differently, this estimate is not terribly far off our estimate of $220 million, excluding the market for residential treatment equipment.

*Source: SNet Global Water Indexes

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