The ‘Fluid’ Economy

June 4, 2008

Steadily rising fuel and food prices and a slowdown of the U.S. economy are making their mark. The market turmoil is having an effect not only on consumer spending habits but likely the water industry as well.

Despite the gloomy forecasts, in May, Morgan Stanley closed on a $4 billion new infrastructure fund, significantly exceeding its original target of $2.5 billion and clearly demonstrating that Wall Street is interested in investing in public infrastructure.

Goldman Sachs Group, Inc. raised a $6.5 billion infrastructure fund last year. Citigroup, Inc. is also raising money for an infrastructure fund that is expected to be in the $4.5 billion range, exceeding its $3 billion target, according to DealmakerDaily.com.

This comes as no surprise. Generally, investors look at infrastructural investments as more stable, not to mention that because the majority of infrastructure in the U.S. was built during the first 30 years after World War II, it is hard to ignore the upsurge of infrastructure rehabilitation and replacement the nation will face over the next several decades.

However, infrastructure is not the only problem we are facing today. Climate change and drought are affecting many areas in the U.S.

According to a report from the Bush administration, rising temperatures caused by higher emissions of carbon dioxide will likely impact America’s agriculture, land and water resources and biodiversity in the next 25 to 50 years.

While it is hard to predict exactly how climate change will affect the water and wastewater market, it is likely that soon consumers will add the cost of water next to the soaring cost of food and oil.

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About the Author

Neda Simeonova

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