State of the Industry

Jan. 23, 2024
General optimism for 2024 is shaded with concerns for inflation and regulatory changes.

The WaterWorld State of the Industry Survey 2023 had 91 responses. Water and wastewater professionals are represented whether they are water only, wastewater only, or both water and wastewater. Percentages have been rounded up or down to a whole number based on basic mathematical principle, and all are calculated with 91 being 100% of survey takers, even if answers were left blank to certain questions or options within a question were left blank.

Who is represented in the survey

The survey takers represent 42 of 50 states. Non-participating states were Alabama, Arkansas, Indiana, Maine, Nebraska, Rhode Island, South Carolina and Vermont.

The most responses came from California with 10, there were a handful of states with one response, most were two or three, and there were some states with a representation of five and six responses per state.

The primary job function of those who took the survey was close to even, and in answer to the question “In which of the following ways are you involved in your company’s/facility’s purchasing decisions?” most respondents checked three of the four boxes or all four boxes: Determine Needs or Options, Evaluate Brands, Specify Product or Vendors, and Authorize or Approve Purchases. This group of people is evaluating the market based on needs and budgets and ultimately either advising decision makers or making purchasing decisions.

Interestingly, there may have been a shift for this type of professional, who may have moved from other industries into water over the last decade. People 50 years or older represent 77% of all the age groups, but the years of experience in the industry is more evenly distributed. Supporting this guess is that zero people marked they are under age 30, and only 7% claimed to be 30-39, but 21% said they have less than 10 years of experience. Following this logic through the data set makes the assumption even more likely (Fig. 2 and 3).

The majority of responses were from municipal or county owned water systems, contractors or consultants, and private or investor-owned water systems, with a varied group with the fewest respondents making up a group including manufacturers and suppliers of equipment, federal or state agencies (including EPA), and manufacturing facilities or industrial systems (Fig. 4).

Sentiment and outlook

In response to how revenue changed this past year 33% reported an increase, 40% reported it stayed the same, and 9% reported a decrease.

When asked if they expect a revenue change in 2024, 50% forecast an increase. Almost all who had an increase in 2023 predict staying the same or expecting an increase, showing an overall feeling of stability.

In 2024, 30% predict staying the same, and almost all who stayed the same in 2023 or experienced increases predict staying the same, so although these systems might not expect an increase, again, I think this shows an overall prediction of stability.

Of four who expect a decrease, two predict to be down from increases enjoyed in 2023, and two predict they will continue their downward trend.

This is despite almost all respondents anticipating material prices and bid prices going up in the coming year. This indicates water bills are likely to go up.

When asked about how they would rank the coming year and the general health of their companies, the overall feeling looks optimistic. Most are ranking their organizations’ outlooks as good or very good, with even a few marking excellent, and there were nine who predict mediocre business yet still rate their organizations as good or okay. Only two organizations are marking themselves as weak.

Where are systems looking to invest their resources? 

In answer to the questions “are you planning new construction of water/wastewater facilities?” and “are you planning to upgrade current water/wastewater facilities?” 37% say they are planning to put budget towards both. Combined with those yet to firmly decide, the majority looks to be open to spending within this topic. Altogether, 19% said they definitively don’t plan to do either (Fig. 5).

When asked how they plan to spend their budgets over the next two years, the category “engineering & construction services” won the day with 49% of all 91 respondents marking between 5% and 100% of their budgets going into this bucket, and 18% of all 91 responses noted they will spend 50% or more of their budgets in this category.

Other notable categories were meters & meter reading, pumps, motors & drives, and pipes & distribution. The open-ended “other” category got some written clarifiers like seawater desalination, bioaugmented products, and energy efficiency. The least amount of budget in a single category for this group of survey takers was leak detection services & equipment.

When asked about what product categories they already have versus what they plan to buy within the next 24 months, the hot item is elusive. It seems these items are already owned, do not apply or are planned to buy. The one that sticks out is hydrofracturing equipment which has little plan to buy responses and a lot of non-applicable responses, along with some who already own such things.

What’s keeping folks on their toes

The open-ended question “What are the most important industry issues that will affect your organization in the next 24 months?” provoked some of what was expected and some deeper insights. 

Expected answers included lead and copper line inventory and replacement, and other federal and state regulations on such things as PFAS. Additionally, price increases and supply chain difficulties, tech upgrades, and workforce stressors are present.

Many interesting answers noted inflation and the general state of things, never mind just the water industry. One respondent wrote, “Inflation pressure [is] on everything; negative public opinion regarding inevitable rate increases.” The responses that mention inflation and the economy generally seem to intimate they mean in both senses: how much the utilities have to pay to run the place and in turn how much the water bill is going to go up for consumers and on the other side, what those customers’ rate expectations are.

For some several topics are on their minds, and for others it seems to be one looming topic, such as the respondent who answered “FUDNING” (in all caps) or this respondent who says definitively, “Source Water hands down, we’re going through a drought and the city that supplies us and 8 other municipalities has been affected. I foresee water conservation as being a huge topic for next year as we need to educate our residents on how to conserve water, shift to growing native shrubs and bushes and get away from grass growth.” Here again, as in the answer about inflation, there is an expressed need to communicate with the customers.

It is interesting that the pervasive nature of fear permeates these respondents’ work lives just like it does for many industries and the overall public at this moment in time, but the general tone remains optimistic. So when the utility bill goes up, just remember the value of clean and safe drinking water, and all the work that goes into getting it to the customers. Open and honest communication with the customers will be paramount.