Companies in this industry operate water treatment and water supply systems; sewer systems and sewage treatment facilities; and steam and air-conditioning supply systems. Major companies include American Water Works, Aqua America, and California Water Service (all based in the US), along with France-based global giants SUEZ Environnement and Veolia Environnement, Brazil's SABESP, and the UK's Thames Water.
The size of the global water utility market is estimated to be $185 billion, according to S-Network Global Water Indexes. Private-sector operators make up about 20% of that market. Though public utilities dominate, competition among private water management companies takes place in major markets in Europe, Asia, Australia, and the Americas.
The US commercial water and sewer utilities industry includes about 4,800 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $14 billion. The commercial industry is small compared to the water and sewer services operated by many regional and local governments in the US. Government-owned water and sewer utility services have annual revenue of about $110 billion.
Demand depends on commercial and residential water needs, which are related to population growth and to the level of economic activity. The profitability of individual companies depends on efficiency of operations, because prices are fixed by public utility commissions (PUCs). Large companies have economies of scale in operations and the ability to raise capital for infrastructure improvements. Small companies can compete successfully through superior engineering or by...