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Five-year outlook sees pipe market nearing double-digit gains

Source: Freedonia Group, Cleveland

U.S. water and wastewater pipe demand will grow 7.7 percent per year to $18.1 billion in 2018, fueled by the building and construction market plus a continued need to upgrade and repair the country’s aging sewer and water pipe network, according to Water & Wastewater Pipe, a new Freedonia study.

In the municipal market, the majority of pipe demand is attributable to the repair and replacement of a large existing infrastructure, notes Freedonia analyst Mike Deneen. “There is a pressing need for repairs and replacement; however, they are often deferred until a burst pipe requires immediate action,” he adds. “It is anticipated that utilities will successfully increase end user water and sewer fees over the forecast period, enabling them to more easily fund repair and replacement projects.”

In the building construction market, demand for water distribution and service pipe was severely constrained as housing activity declined precipitously from 2006 through 2009, and nonresidential building contracted at double-digit rates in 2009 and 2010. A strong recovery will occur in housing, with the number of starts expected to post double-digit gains through 2018—spurring water supply and drainage infrastructure demand.

Polyvinyl chloride will remain the leading resin used in plastic pipe due to its dominant position in large diameter applications. Despite the emergence of plastic alternatives in larger diameter product, concrete and ductile iron pipe demand will retain significant market share due to widespread use in sewer, drainage, and water transmission applications. — Freedonia Group, 440/684-9600; www.freedoniagroup.com.