Study Predicts $52 Billion in Water Utility Trenchless Technology Investments over Next Decade
(UC) — A new study by Bluefield Research expects the economic recession combined with aging water infrastructure across the country will spur over $50 billion in trenchless technology investments.
According to the study, the forecasted 3.4% growth rate for trenchless technology deployments will outpace broader municipal water infrastructure investment in a post COVID-19, recessionary environment.
The report, Trenchless Players Move to Redefine Pipe Market: Forecasts, Competitive Positioning, and Water Market Trends, 2020-2030, shows total spend across the range of trenchless technology options exceeding US $52.5 billion over the next decade.
The lion’s share (76%) of this spend will focus on the rehabilitation of underground assets, while the remainder of spend will be for new construction.
“Due to its cost-effectiveness, reduced environmental impact, and quicker project timelines, trenchless offers a potential bright spot for growth in a municipal market that is bracing for looming financial impacts,” notes Bluefield Analyst Mariel Marchand. “Trenchless solutions have been promoted as a cheaper alternative to traditional technologies and could save as much as 30% on total project costs in urban areas."
At the forefront of the forecasted market growth will be cured-in-place pipe (CIPP) technology that accounts for 36% of total spend, followed by horizontal directional drilling (HDD).
The report’s findings align with those of Underground Construction magazine’s annual directional drilling survey, which revealed areas of ongoing demand that demonstrate the value of HDD to the industry.
The primary opportunity will be refurbishing the broader 1.8-million-mile wastewater pipe sector, although increasing focus on water pipe leakage is also driving innovation and longer-term opportunities.
Over the last four years, Bluefield has identified 18 company acquisitions including deals by Toro, Granite Construction, and Vortex. Through these acquisitions, companies are positioning themselves to gain market share, while more established market leaders expand their product portfolios.
Aegion’s Insituform business unit continues to be the proven market leader with its CIPP solutions.
“Trenchless technologies are not new, but the growing interest from private equity and strategic investors signals a more competitive landscape that bears watching,” says Marchand. “Given the economic downturn and resulting financial constraints on municipal stakeholders, a push to extend the life of assets with fewer capital costs will be an increasingly attractive option.”
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