Smart Water — By the Numbers

Transparency Market Research has just published the results of a market study on the global smart water management market, estimating that the market will grow to a value of US$15.2 billion by the end of 2019 at a remarkable CAGR of 17.7% during the period from 2013 to 2019.[1]

As one of the companies cited by the report as a key player in the smart water management market, in our experience there are at least four compelling factors that are driving this growth:

  • The requirement to comply with ever more stringent government regulations regarding water quality and sustainable water stewardship.
  • The expectations of rate-payers to get top-notch but cost-effective water services.
  • The need for water utilities to motivate and empower their customers to be partners in the effort to conserve precious water resources.
  • The exciting technology advances that are allowing the water utility sector to become an integral part of the 21st century of IOT interconnectedness and the power of big data.

Yet smart water management market is only one of the numbers that comprise the water business. It is dwarfed, for example, by the US$1 trillion that Global Water Intelligence (GWI) expects to be invested globally by 2022 in order to upgrade aging water infrastructures and meet the 50% increase in demand for fresh water expected by 2050. Thus, the water infrastructure market is expected to grow 6% per annum and be worth $500 billion by 2022.[2] Is it any wonder, then, that water stocks outperformed the rest of the stock market by a convincing margin last year? According to GWI’s annual water investment review, the GWI Global Water Index was up 7.1% last year, in comparison to the MSCI World Index, which fell by 0.3%.[3]

Just last week Claudia Quiroz, a Fund Manager at Quilter Cheviot, posted an article[2] extolling the water industry’s investment virtues. The water industry makes for a diverse portfolio since it includes a very broad range of companies, from water utilities to pipe manufacturers to equipment manufacturers to irrigation companies, just to mention a few. In particular, she refers to:

  • top-10-water-stocksWater utility companies, with their increasing need to focus on cost savings and customer service in order to thrive in this competitive marketplace. In the water utility segment she specifically mentions American Water Works (United States), Pennon Group (United Kingdom), Hera (Italy), Veolia Environnement (France) and SABESP (Brazil). And just in case you are about to give your stock broker a call to add water utility stocks to your portfolio, the table to the right lists TheStreet’s[4] top 10 water utility stocks for 2016.
  • Water conservation technology companies, which offer solutions to preserve and conserve water, not only for industrial users but also for households. A growing population, plus an increase in the usage of water per capita, is driving the adoption of advanced technologies into everyday life.
  • Agriculture, she notes, is a thirsty industry, currently consuming more than two-thirds of the world’s fresh water. Efficient and economic irrigation is fundamental to conserving water in the agricultural sector and manufacturers of irrigation and agriculture equipment include Jain Irrigation (India), Kubota (Japan), Lindsay Corporation (United States) and Toro Co (United States).

There is no question that the water industry is on an exciting journey towards ever smarter technologies and methods. And all of us, without exception, are stakeholders in its success.

References

[1] Global Smart Water Management Market, Transparency Market Research, January 27, 2016

[2] Claudia Quiroz, Investing in Water, January 18, 2016

[3] Global Water Intelligence, January 2016

[4] TheStreet Ratings, January 2016

×

Comments are closed.