Crumbling U.S. Water Infrastructure is an Investment Opportunity

Implications: This article points to an area of the water industry that will continue to enjoy positive dynamics. For the investor, the message is simple: companies selling water infrastructure-related products and services, like large pipes, large valves, inspection and repair services, water pipeline engineering and construction, etc., the future has a strong upside. The current housing crisis may hurt some municipalities' ability to fund some of these projects. However, in most cases, delaying them is difficult or impossible, specially when water service to customers is at stake. Further, a new Washington administration in 2009 will look at rebuilding infrastructure as a strong potential avenue to re-energize the economy and create jobs.

Analysis: Publicly-owned companies like Northwest Pipe, Ameron, Insituform, Layne & Christensen, Black & Veatch, ITT Industries, Veolia, URS Corp., Tetra Tech, and many other privately-owned companies will benefit. Smaller, regional construction companies, with solid connections and background to municipal water agencies will be in the recieving end of multi-million dollar projects in this space. Finally, merging of regional independent operators to build larger, national entities, is to be expected.