WeiserMazars LLP, a leading accounting, tax and advisory services firm, recently announced the release of its first annual U.S. Water Industry Outlook survey.  Participants were asked to predict the future of the industry over the next three to five years - 71% of respondents expect significant consolidation in the next five years through acquisitions of smaller utilities by larger investor owned utilities.  Respondents also consistently stated that the fragmented structure of the industry had a negative impact on the quality of customer service and the ability to raise capital for infrastructure upgrades. 

Consolidation of the U.S. water industry through privatization or semi-privatization has been anticipated for some time.  However, negative public perception of the privatization of this essential public service has prevented this consolidation from taking place.  Externalities are changing this attitude - as access to financing becomes more challenging for municipalities, raising taxes becomes the only alternative, but an unpopular option.  Many states are enacting public-private partnership legislation, paving the way for consolidation to take place.

“The water industry has attracted a lot of private capital during the past few years because of its stability relative to other investment opportunities,” said Jerome Devillers, Head of Water Infrastructure/Project Financing. “Our study shows the time is ripe for consolidation to take place.”

The survey also confirmed other reports that the U.S. water infrastructure is critically aging, with 45% of respondents categorizing their facilities as old to very old, while none of the respondents indicated that their infrastructure was new.  Recognizing the danger of a crumbling water infrastructure, 50% of public and private entities are increasing their capital expenditures by up to 5%.  While respondents predict that capital spending for water delivery and wastewater treatment infrastructure will continue to increase until 2040, the needs versus capital spending gap is expected to grow at a faster rate.

Click on WeiserMazars’ 2012 U.S. Water Industry Outlook to see the survey in its entirety.

About WeiserMazars’ 2012 U.S. Water Industry Outlook
WeiserMazars’ 2012 U.S. Water Industry Outlook is the first survey devoted exclusively to the water industry.  The survey focused on operations, financial results, trends in operating costs, capital expenditures and the elements impacting the future of the water industry.  Participants represented a cross-section of the industry, with 55% coming from private companies and 77% in company management, 55% in executive positions and 22% in middle management.  WeiserMazars assembled an Advisory Board of current and former water industry executives to collaborate with and assist in formulating the survey.  WeiserMazars also engaged C F Effron Company, a boutique independent management consulting firm lending primary and secondary research, to provide an analysis of the data for this study. 

About WeiserMazars LLP
Since 1921, WeiserMazars LLP has provided a unique combination of foresight and experience when fulfilling client needs in accounting, tax and advisory services.  WeiserMazars’ team of over 100 partners and approximately 700 professionals is based out of six U.S. offices, Israel and the Cayman Islands. As the independent U.S. member firm of the Mazars Group – a prominent international accounting, audit, tax and advisory services organization with nearly 14,000 professionals in 69 countries on six continents – WeiserMazars represents clients of all types, including owner-managed businesses, complex, multi-national organizations and high net worth individuals in a multitude of industries.

SOURCE: WeiserMazars

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