State of the Water Industry Report
Now Available:
2026 State of the Water Industry Report
The 2026 State of the Water Industry report reveals a sector facing growing pressure across infrastructure, financing, and long-term water supply reliability. While overall sector health remains stable, the five-year outlook has declined to its lowest level in nearly a decade, signaling growing concern about the future. Aging infrastructure remains the most pressing challenge, closely followed by the need for sustainable funding and long-term water supply reliability. Many utilities are struggling to fully recover costs through rates and fees, creating a widening gap between revenues and rising expenses. External pressures, including economic uncertainty, political dynamics, natural hazards, and supply chain disruptions, are compounding these financial challenges and complicating long-term planning.
Water quality concerns are also intensifying, particularly around emerging contaminants such as microplastics, PFAS, and pharmaceuticals. Addressing these issues is driving up treatment costs, further straining utility budgets already burdened by infrastructure renewal, regulatory compliance, and cybersecurity investments. At the same time, utilities are cautiously exploring new technologies like artificial intelligence (AI), recognizing both their potential benefits and associated risks, especially in the area of cybersecurity. Meanwhile, water supply reliability remains uncertain, with many utilities operating near stress thresholds and lagging in climate adaptation planning. Together, these trends underscore the need for strategic investment, innovation, and long-term planning to ensure the resilience and sustainability of the water sector.
Download the report to explore the latest water industry trends, challenges, and data. With its comprehensive analysis of current trends and future projections, the State of the Water Industry report is an essential tool for water community professionals seeking to stay ahead of the curve.
Executive Summary Report
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“Utilities are being asked to do more than ever with infrastructure. The latest survey makes clear that annual, long-term investment isn’t optional anymore — it’s the foundation for public health protection and maintaining the quality of life in our communities. When utilities have reliable access to capital funding, they can focus on what matters most: delivering safe, reliable water every hour of every day.”
David LaFrance
CEO, American Water Works Association
“External pressures — from global supply chains to extreme weather — are now part of the everyday operating environment for utilities. The resilience our members show in the face of these uncontrollable forces is extraordinary, but resilience alone isn’t enough. We need strategic foresight, supportive policy, and innovations that help utilities maintain reliability even when conditions shift overnight.”
Brent Tippey
Vice President, East Region Drinking Water Lead, HDR and 2026-27 AWWA President
“Utilities clearly recognize the importance of investing in technology and cybersecurity, but many still face real challenges in execution. As technology and threats evolve, utilities must evolve with them — aligning cybersecurity controls, AI policies, and workforce development into a unified risk-informed approach. Strengthening cybersecurity in step with innovation — not after it — is how utilities can realize the benefits of digital transformation without compromising security or reliability.”
Nicholas Santillo Jr.
Former Chair, Water Sector Coordinating Council
“Planning for long-term water security has never been more challenging. Uncertainty is increasing from things like accelerating climate variability and the rapid expansion of tech-based industries. The future is a moving target and hitting it will require more resilient strategies that allow for pivoting on shorter time scales.”
T.J. Stroebl
Market Development Leader at Kurita America and 2027-28 AWWA President
“Just as previous generations laid the pipe that built modern communities, we now have the opportunity to build the human infrastructure that will carry this industry forward. This is a defining moment. If we invest wisely — in training, leadership development, and technology integration — we won’t just stabilize the workforce. We will anchor the next 25 years of reliability, innovation, and public trust.”
Gabriel Evans
2023 graduate of the Transformative Water Leadership Academy and a member of AWWA’s Workforce Strategies Committee
“Public trust is built through meaningful, ongoing engagement with the communities we serve. It’s about showing up, listening and creating space for real conversation — not just communicating when an issue arises. When utilities invest in community education, explain the ‘why’ behind decisions, and invite people into conversations about the future of water, we strengthen understanding, credibility, and the strength of our communities. That kind of engagement turns customers into partners and makes trust a shared responsibility.”
Chelsea Kulp
Director, Communications and External Affairs, New Jersey American Water, and a member of AWWA’s Public Affairs Council
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