Spending and borrowing by water and wastewater utilities in the US has held up well since the onset of COVID-19, in spite of revenue constraints that threaten to significantly restrict future capital expenditure. The US Census Bureau's construction put-in-place survey shows that annual-ised spending on drinking water projects in April 2020 amounted to $18.2 billion, down just 0.7% on the month prior, while sewer and solid waste spending was up 1.5% to $26.1 billion. The two categories are respectively up 12.8% and 6.6% on the same month last year. Likewise, there has been no appreciable drop-off in municipal bond issuance for water and sewer projects (see chart below). Data from Refinitiv reveals that issue volumes in April and May 2020 amounted to $4.9 billion on a combined basis, versus $4.7 billion in April and May last year. Water and wastewater projects were largely uninterrupted by the coronavirus-related construction bans that impacted other infrastructure sectors, and as a result, projects that were funded and authorised have continued to move forward. The strength in bond issuance, meanwhile, can be attributed to the need to finance short-term expenditure in the face of sudden revenue losses. Industry associations have estimated that the pandemic could result in revenue reductions of $27 billion per year for water and wastewater utilities (see GWI April 2020, V26).
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