It seems that there's always a need for more spending on infrastructure. Roads and bridges get the most attention, but what about drinking water?
No surprise, our water mains are falling apart and in desperate need of investment.
According to the U.S. Environmental Protection Agency, U.S. utilities will need to spend up to $200 billion on water systems over the next 20 years to upgrade transmission and distribution systems.
The problem prompted a rare mention of plastics last week from our sister publication Pensions & Investments. It quoted investment executives including Alex Loucopoulos, a partner at Sciens Capital Management LLC, in a story about how water infrastructure offers a promising, and sustainable, investment opportunity.
"There's no surprise in the U.S. that the infrastructure is aging," Loucopoulos said. "The water infrastructure is even more aging because fewer people, especially politicians, have paid as much attention to water infrastructure because oftentimes you can't see it. … It's not a bridge (or) airport. It's underground pipes and sewage."
One surprising plastics angle: the need to deal with microplastics in drinking water.
"The overarching goal of our water strategy is to back the companies that stand to benefit from the global need to improve the efficiency, quality and resilience of our global water networks," said Louis Veilleux, co-lead manager of the Pictet-Water Fund. "These water challenges include the (roughly) 2.2 billion people without access to safe drinking water today, the rapid rise in urbanization bringing 1.5 million people into urban areas each week and straining municipal water supply, and the alarming rise in contaminants such as microplastics within our existing water systems. These will all require massive investment to overcome and should — we believe — drive an addressable market opportunity that will grow well ahead of GDP for decades to come."
We've noted recently that plastics pipe sales are strong. Is infrastructure spending for real in 2023?