Beyond the Dashboard: Digital Water's Operational Turn

But before I let you go, I want to talk about what caught my eye this past week.

So I don't know.

It's usually this time of year, but we do it periodically because we do track it, and we're going through several forecasting exercises at Bluefield, whether it be pipes, treatment, trenchless, and so on, digital, as Maria said.

So I was looking at construction put-in-place data this past week.

So the U.S. Census Bureau – They put out a monthly read on how much the country, the U.S. that is, spent building things, things from office towers to sewer lines, water supply, and so on.

And there seems to be a real split personality in the water sector right now, or at least some divergence.

And that is water supply spending has doubled since 2019, according to the data, if I'm reading it correctly.

And sewer spending has also doubled.

Yet, both seem to have stalled this year according to the data, lacking any revisions.

At the same time, so that's one direction, a bit of a slowdown, not a decline, should I say, but flood control seems to be growing at about 30%, according to the data.

While growing from a much smaller base, it is still growing significantly.

And so in the last month, water supply is up about 9% year over year, and sewage is actually, in this case, down 2%, which is fantastic.

fairly sharp deceleration after years of double digit growth and flood control and conservation dams levees watershed restoration is up about 32 percent which is the fastest growing line in the entire report so my first instinct is to blame you know federal money running out the federal funding cliff which we just put some research out on but i think that's actually too simple the 2021 infrastructure law put about 43 billion into state revolving funds and that money it really doesn't expire until the end of the year as far as the appropriations go but in obligations but it's plenty of states haven't even distributed all of what they have so we still have a ways to go and i think our numbers show that the current pace it's going to be closer to 2030 and beyond when these federal funds are going to be released or put out on the street for construction.

The more mundane explanation for this slowdown, I would argue that finally the cost of money and financing is catching up to us.

It's expensive and utilities have been cautious, not only because of that, but also inflation.

Inflation is...

while seemingly stable and cooling from prior years, it's still a bit uncertain with things like tariffs and supply chain impacts.

But also new home construction is down about 5%.

And that's dragging down the things like the subdivision pipe extensions and new capacity additions as needed, particularly in the high-growth Sunbelt states.

So I'm trying to work through what this means or how it influences Bluefield's forecast and our perspective on the market.

We're about to release our pipe forecast publicly.

I think clients already have access to some of the data.

now and it's that the new housing bill new housing starts is definitely having impact as well as material prices at the same time so broadly speaking same sector two very different momentum stories happening at the same time and this is worth looking at if you're interested in talking about this you can always let us know and what this might mean for the water sector among other sort of macroeconomic indicators, third-party research, but also what does it mean for Bluefield Research's forecasts.