US demand to grow more than 7% yearly through 2018
Water and wastewater pipe demand in the US will grow more than seven percent per year to $17.8 billion in 2018. Gains will rebound from declines experienced during the 2008-2013 period, in which pipe markets were negatively impacted by declines in construction spending. Strong increases in construction activity will fuel gains through 2018 in building construction applications. The continued need to upgrade and repair the country’s aging sewer and water pipe network will spur gains in the municipal market.
Favorable housing, plumbing trends to boost water pipe demand
New housing construction declined precipitously from 2006 through 2009 and nonresidential building activity contracted at double-digit rates for three years beginning in 2009, severely constraining demand for water pipe. Strong recovery is expected in the housing market, which will spur construction spending and fuel pipe demand. Also boosting water pipe 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 economic downturn in housing construction, many builders installed fewer bathrooms in the new houses that were completed, further restraining pipe demand. Greater consumer focus on larger kitchens and bathrooms will also create opportunities. For example, new homes increasingly feature multiple sinks for specific end uses.
Infrastructure spending to benefit municipal market
Pipe demand in the municipal market will rebound due to improved government spending on infrastructure projects. As the economy recovers, water utility suppliers will have additional revenue to invest in pipe replacement. Despite this improvement, the nation’s water infrastructure is expected to remain in disrepair.
Plastic pipe to lead gains
Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets. High density polyethylene (HDPE) pipe will continue to gain ground on copper and other competing pipe materials, particularly in water distribution applications. Polyvinyl chloride (PVC) will remain the leading resin used in plastic pipe through 2018, due to its dominant position in applications such as potable water and drain, waste, and vent. Despite increased competition from plastics, concrete and ductile iron pipe will retain a large share of the sewer, drainage, and water transmission markets.