U.S. demand to rise more than 10% annually through 2016
U.S. demand for water and wastewater pipe is expected to rise more than 10% per year to $18.3 billion in 2016. Gains will rebound strongly from the declining demand experienced during the 2006-2011 period, in which pipe markets were negatively impacted by the 2007- 2009 recession. Going forward, rising demand will be fueled by a more favorable environment for public infrastructure spending, following severe budgetary constraints in 2011 that caused many major state and municipal projects to be delayed. Other factors benefiting pipe demand through 2016 will include healthy increases in construction spending and the continued need to upgrade and repair the country's aging sewer and water pipe network. Also boosting demand will be a rebound in the size and number of bathrooms per new housing unit to levels common in the middle of the last decade. During the 2007-2011 downturn in housing construction, many builders installed fewer and smaller bathrooms in the new houses that were completed, further restraining pipe demand.
Government cuts, housing crisis has reduced demand
Water and wastewater pipe demand has been battered in recent years by two trends: strained government budgets and the housing crisis. Government entities have reduced spending on sewer and water infrastructure due to budget concerns. Macroeconomic conditions have adversely impacted tax revenues and increased demand for other government services, pushing infrastructure spending down the list of priorities. The housing crisis has worsened the matter because local water agencies are not collecting water fees from the thousands of foreclosed homes around the country. The housing crisis has also caused construction spending to plummet, decimating demand for pipe in water distribution applications.
Plastic pipe to be fastest growing pipe material
Plastic pipe will be the fastest-growing pipe material through 2016, continuing to steadily take share from competing materials in a range of markets. Rising demand for plastic pipe will be driven by resin improvements that enhance pipe performance in more demanding environments, while processing improvements will allow plastic pipe to be more costeffective compared to other materials. Polyvinyl chloride (PVC) will remain the leading resin used in plastic pipe through 2016, due to its dominant position in small-diameter applications such as potable water distribution, sanitary sewer and agricultural markets. While PVC pipe demand declined considerably during the 2006-2011 period, the expected recovery in building construction activity will fuel gains through 2016. High density polyethylene (HDPE) pipe, however, has the best long-term growth prospects among major plastic pipe resins. HDPE will continue to gain ground on concrete, steel, PVC and other competing pipe materials, particularly in drainage, storm sewer and water distribution markets.
This upcoming Freedonia industry study, Water & Wastewater Pipe, presents historical demand data for the years 2001, 2006 and 2011, plus forecasts for 2016 and 2021 by market (e.g., municipal, building construction), application (e.g., sewer and drain, potable water, irrigation) and material (e.g., cast iron, plastic, concrete, copper, steel). The study also considers market environment factors, details industry structure, reviews company market share data and profiles industry players, including Advanced Drainage Systems, American Cast Iron Pipe, Hanson Pipe, JM Eagle, Mueller Water Products and Rinker Materials.