Logistics Brief



U.S. Water Industry Outlook 2017 Recap

July 19, 2017

By Chase Drossos

Water made headlines in main street newspapers in 2016, with the major contamination discovery in Flint, Michigan, the drought in California, and the presidential campaign. These headlines highlight how vital water is to the US economy and the American people, and the challenges the industry faces.

Over the years, our Outlook has advocated that water requires specific political and financial support to face successfully the challenges that lie ahead. In this year’s Outlook, we continue to provide an overall picture of the water industry and identify its future trends.

Although we have maintained our traditional survey structure, addressing the three broad topics of Operations, Finance, and the Industry’s Future, we continue to make enhancements to the Outlook.

In the last four issues of the US Water Industry Outlook, respondents identified the recurring challenge of aging infrastructure. Aging infrastructure is a major component of the business operations and risk management at water utilities.

We expect this issue to continue to be a top challenge in future years. Our 2015 Outlook found that the water industry was increasingly technology focused, viewing technology and innovation as the means to address its challenges.

Interestingly, respondents to the 2015 Outlook indicated that replacing aging infrastructure was the main driver for technology investment, followed by reducing operating costs and improving regulatory compliance. For this reason, we have added an Operational Innovation section to the 2017 Outlook that focuses on energy efficiency and cybersecurity.

We are also pleased to include interviews with three industry leaders and our cybersecurity expert. We trust that you will find their perspectives insightful.

The backbone of this Outlook is a 26-question survey conducted in late 2016 in which we capture the perspectives of different stakeholders in the industry.

These stakeholders include water and wastewater systems and operations management, procurement, or other support for water and wastewater companies, and government regulators. Of the respondents, 88% are in company management, of which 63% are in executive positions and 25% are in middle management:

With the added focus on Operational Innovation (primarily energy efficiency and cybersecurity) in the 2017 US Water Industry Outlook, we identified trends of how companies are adapting and differentiating themselves in the marketplace.

Our respondents rated energy-efficient advance water treatment technologies as a top factor in bringing benefits to the water industry. Smart metering and data analytics are considered to be among the most important technology advances bringing the greatest benefits to the industry. Smart metering identifies weaknesses and opportunities to improve water and wastewater operational cycles.

The Outlook not only discusses the specific benefits of these innovations but also quantifies the financial and environmental benefits that respondents gain after adopting energy efficiency programs.

Cybersecurity is considered to be the top threat facing business and our nation’s critical infrastructure, according to reports and testimony from the Director of National Intelligence, the Federal Bureau of Investigation, and the Department of Homeland Security. Participants in our survey are well aware of the growing importance of cybersecurity.

More than half of the participants are employed by companies that have identified cybersecurity as a significant risk. Cybersecurity and data privacy systems are considered to be the most relevant and useful resource to mitigate cybersecurity system risk. The full Outlook takes a closer look at participants’ responses regarding various cybersecurity challenges.

The Finance section of the outlook focuses on three major components:

  • Aging infrastructure and capital expenditures—an ongoing challenge recognized by both the participants and the American Society of Civil Engineers.
  • Access to financing—the gap between current policy changes and viewpoints of participants.
  • Reporting standards—innovative disclosure improvements leading the way to greater transparency.

The Future of the Industry section emphasizes the prevailing water scarcity issues the US currently faces and discusses respondents’ perspectives regarding future trends and solutions, including reuse and desalination.

This year’s Outlook highlights the complex planning needed to continue providing customers with an affordable, sufficient, and safe utility. Securing the water industry’s future demands that we continue to plan and balance many factors, including public opinion, economic trends, environmental impact, regulation, customer rates, and politics.

The full 2017 US Water Industry Outlook is available on our website, along with a recording of the April 12, 2017 webinar that reports on its findings. These items, as well as prior year surveys, can be found at the following links:

2017 US Water Industry Outlook: //mazarsusa.com/industries/water/

Webcast: //mazarsusa.com/insights/webcasts/u-s-water-industry-outlook/

Please feel free to reach out to us if you would like to discuss the US Water Industry Outlook and its findings.



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