By now, I think it is safe to say that there is no “magic bullet” to end the COVID-19 pandemic. While many may have thought over the last two years that there would be a day we would wake up and find our world and lives returned to some semblance of pre-pandemic normal, that is just not how viruses or pandemics work.
As President Biden acknowledged in January 2022, the emergence of the Omicron variant is leading to a rebalancing among economic, societal considerations, and strict medical justifications for sweeping public health guidance. Like the flu, we are likely headed down a road where we learn to live with the virus and use vaccines and new forms of treatment to ameliorate the worst of the symptoms.
Our economy has certainly experienced some challenges over the last two years, yet there is still a sense of optimism. For the most part, WWEMA member companies performed better than they expected, and passage of the new Bipartisan Infrastructure Law in November 2021 means that new funding for water and wastewater infrastructure should start flowing in the coming months.
WWEMA conducts an annual Market Indicators Survey and the results for 2021 and estimates for 2022 were optimistic. Despite remaining pandemic-related uncertainty and overall challenging economic conditions including supply chain issues and rising costs of goods, the data from the 2021 survey for domestic sales showed 85 percent of the respondents reported an increase in domestic sales for the reporting period, with the majority of respondents (approximately 60 percent) reporting positive sales growth in the 2.5-5 percent range. Of that number, over one-third indicated solid growth of five percent.
The data also showed approximately one-quarter of respondents had robust domestic sales growth in the 7.5–10 percent range for the Sept. 2020–Aug. 2021 period. Overall growth in domestic sales for the following year’s period is projected to be continually strong, with 85 percent of respondents expecting positive growth and over half (56 percent) estimating growth to reach the 5–10 percent range. This is consistent with other economic indicators and projections that expect 4–6 percent growth in 2022.
While domestic growth should be strong, the same cannot be said for expectations in the international markets, where most respondents expected sales to remain relatively flat.
As 2022 begins, we are already hearing from our members that the pace of bookings and orders are picking up. The current primary headwind is how the Office of Management and Budget (OMB) will define and implement the new Buy America requirements outlined in the Bipartisan Infrastructure Law.
Unlike other Federally-funded programs — such as transportation, highways, railways, and aviation — which have dealt with Buy America requirements for several decades, this will be a brand-new requirement for the water sector, which has only experienced specific and finite requirements under the American Recovery and Reinvestment Act in 2009 and more recently the American Iron and Steel (AIS) requirements put in place in 2014.
While AIS addresses a relatively short list of products made from iron and steel, the new requirements will apply to all products in the water sector made from iron and steel as well as all manufactured goods and construction materials. The clock is currently ticking on OMB guidance development with the implementation and compliance date currently set for May 15, 2022 — six months after the law was signed by President Biden.
Hang on to your hats — it may be a bumpy ride, but hopefully one that will get us to the finish line with many new projects underway in 2022. WW
Published in WaterWorld magazine, February 2022.