3.

Global water market: current

environment supports growth
The global water market to rebound following the
economic slowdown
Recent estimates put the size of the global water market
at about USD 591 billion in 2014. This includes USD 203
billion from municipal capital expenditure, USD 317 bil-
lion from municipal operating expenditure, USD 1 billion
from industrial capital expenditure, USD 37 billion from
industrial operating expenditure, USD 12 billion from
point of use treatment and USD 3.7 billion from irriga-
tion. Market opportunities related to the water sector
are expected to reach USD 1 trillion by 2025.39
Over the last few years, the economic downturn has led
to weak residential and commercial construction mar-
kets, delays in large infrastructure projects and a decline
Water scarcity and increasing pressure on
limited global water resources remain the
secular drivers of growth in the water sector.
in industrial production. Public financing for infrastruc-
ture maintenance and upgrades was temporarily post-
poned due to budget constraints. As consumers faced the
prospect of unemployment, it was also politically difficult
to raise water tariffs to cover much needed infrastructure
investments, resulting in a decrease in water expenditure
growth.
Despite the economic slowdown, various factors support
continued growth in the water market. Governments and
utilities are recognizing that an appropriate level of tariffs
is required to expand and maintain water and wastewater
infrastructure to guarantee a sufficient and safe water
supply, while ensuring adequate services and profitability.
At the same time, the increasing rate of private sector
participation in providing funding for infrastructure, tech-
nology and expertise is also supporting growth in the
water sector. Most importantly, water scarcity and increas-
ing pressure on limited global water resources remain the
secular drivers of growth in the water sector. As a result,
growth in water expenditures is expected to rebound at
an expected CAGR of 5-6% over the next 5 years.40

Figure 17: Global water market

800

700

600

500
in USD billion

400

300

200

100

0
2014 2015 2016 2017 2018

Point of use equipment Irrigation equipment Industry operating expenditure

Industry capital expenditure Utility operating expenditure Utility capital expenditure

Source: GWI, RobecoSAM

39
GWI, RobecoSAM
40
 obecoSAM and GWI
R
2014

20 RobecoSAM Water: the market of the future