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Outlook remains positive, but the pace of growth is likely to slow
The Water and Wastewater Equipment Manufacturers Assn. (WWEMA) and Boenning & Scattergood Inc. have released the 2017 2Q WWEMA/Boenning Leading Demand Index, formulated to provide insight into market and funding conditions related to water and wastewater projects. The Index declined slightly in the second quarter, and although key indicators remained directionally positive, the declining rate of growth indicates a maturation of the cycle that is likely to impact sales growth. According to the report’s author, Boenning & Scattergood Managing Director Ryan Connors, the [email protected] Index reading indicates that the municipal water and wastewater cap ex cycle is in the process of plateauing at a healthy level.
The report tracks five factors including municipal bond issuance, water and wastewater utility employment data, water infrastructure equity performance, residential building permits, and ductile iron pricing to gauge market and funding conditions related to water and wastewater projects. A review of the market and some key factors that make up the Index indicate the demand outlook for water and wastewater equipment remain positive, but the pace of growth is likely to slow; municipal utility payrolls rose in April, but appear likely to turn negative in Q3 2017; and housing permits declined in May, but the outlook for homebuilding remains positive.
The full report includes charts relating to these factors, depicting data and trends dating back three to five years, as well as additional background and analysis. It is available exclusively to WWEMA members.