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Spending on Water Projects Still Rising - But Clouds LoomCopyright © 2008 Paul CartonAs concerns grow over water shortages and the quality of the world’s supply, a recent ChangeWave industry survey finds increased water project spending for 2008 - but not at the levels of previous years. And there may be trouble ahead. According to the survey of 147 professionals working in the water industry, two-thirds (67%) think water project spending will increase over the next 12 months - but that represents a sizable 14-point drop from the previous ChangeWave survey in June 2007. Despite the decline, these results are still relatively upbeat. However, the survey shows clouds looming over the industry that could push spending numbers down further - and they’re centered in the U.S. Zeroing in on the United States The Wall Street Journal recently reported that 40% of fresh water consumption in the U.S. is from industrial applications and that water use normally falls during an economic recession. Moreover, the stock prices of many U.S. water utility companies have declined recently on fears of a recession. Add to this the findings of our ChangeWave survey, which shows a drop in the percentage of U.S. water industry respondents who think project spending will increase over the next 12 months within the private, federal and local government sectors. Note the main reason for these more conservative growth projections is very straightforward: By better than a 2-to-1 margin, industry respondents believe a U.S. recession would lead to decreased water project spending. “Investors in water should keep a close eye on water project spending during a recession,” says Josh Levine, co-editor of ChangeWave Investing. “But our survey also shows there are still plenty of opportunities out there. In particular, industry respondents are most excited about two sectors right now - Wastewater Treatment and Water Infrastructure Repair and Replacement. That’s where we are focused.” Respondents were also excited about a short list of top water companies, with industry behemoth General Electric (GE) (42%) ranking as the leader. Of course, GE is a huge conglomerate and water is only a small part of their business. But there are a handful of other companies industry respondents cited as having momentum: Ben Franklin stated it clearly more than two centuries ago, “When the well’s dry, we know the worth of water.” And while there may be blips in the rate of water spending short term, wise investors know that water issues are going to be with us for centuries to come. Be sure to check out our website at the link immediately below for ChangeWave’s next look at the water industry. About The Author:
*** Digital Reprint Rights *** *** Author Notification *** We ask that you notify the author of publication of his or her work. Paul Carton can be reached at: agolub@changewave.com *** Print Publication Reprint Rights *** If you desire to publish this article in a PRINT publication, you must contact the author directly for Print Permission at: agolub@changewave.com
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