Document summary
This report is an update to BAML 2011 "
Global Water Sector " report. Indications suggest that we have already arrived at peak water globally. The long- term supply challenges are vast and demand is projected to overshoot supply by 40% in the next 20 years, with half of the world’s population living under conditions of 'water stress' by 2030. Water looks set to become scarcer than oil, with potential for the supply/demand imbalance to manifest itself in increased domestic social unrest and trans-boundary disputes (30 countries on three continents are potential locations for future conflicts over water). Water is a US$500bn market today, which, despite the downturn, is delivering a global CAGR of 6-7%, well above global growth rates. Growth drivers include a range of megatrends: water scarcity, population growth, urbanisation, industrial growth, infrastructure development and renewal, pricing, growing private sector investment, food and energy security, stakeholder pressure, and tightening regulation. By 2020, BAML estimates that the water industry could be worth US$1tn, with Asia and South America seeing the biggest growth. BAML sees opportunities for companies with exposure to three main areas: 1) Water Treatment; 2) Water Management; and 3) Water Infrastructure & Supply.