In June, the American Water Works Association (AWWA) released its 2025 State of the Water Industry (SOTWI) report, which regularly ranks the top challenges and priorities facing the sector. This year, financing for capital improvements led the way as the top challenge among water sector professionals.
Based on insights from 3,575 water professionals surveyed in late 2024, the State of the Water Industry report provides a comprehensive look at the most pressing challenges and priorities facing the North American water sector.
“The cost of providing water service is rising, as the compounding needs to replace aging pipes collides with investments required to meet new regulatory requirements,” said AWWA CEO David LaFrance.
As stated in the report’s executive summary, water sector financial challenges are occurring against a backdrop of significant economic shifts in North America. Inflation is placing additional pressure on utility budgets, with increased materials and construction costs affecting infrastructure projects. While water utility work has enjoyed an influx of federal infrastructure funding in recent years, the sector still faces intense competition for these resources, and the availability and future direction of these funds remain uncertain.
AWWA State of the Water Industry 2024: Source water protection, financing top sector priorities
The report said utilities of all sizes are struggling to secure funding for essential upgrades and new treatment technologies. The survey revealed only 41% of utilities feeling very or fully able to cover costs through rates and fees. While access to capital has improved for some, 13% of utilities still report poor access, demonstrating persistent disparities. Rate increases remain the most common funding method, utilized often or always by 44% of utilities. Looking ahead, investments in new treatment technologies and green solutions are expected to more than double in the next one to three years, indicating a growing focus on long-term sustainability.
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Some of the other highlights from this year’s survey include:
- Aging Infrastructure: Ranking as the second most pressing concern, many systems are reaching or exceeding their design lives, necessitating significant investments to ensure continued service and public health protection.
- Emerging Contaminants: Nearly 45% of respondents indicated significant concern about per- and polyfluorinated substances – commonly known as PFAS — a sentiment driven by new regulatory pressures and the need for investments in advanced treatment.
- Workforce Challenges: Workforce issues are a major concern for utilities — ranked seventh in the top ten challenges this year — as they face the challenges of an aging workforce, recruitment difficulties, and the need for specialized skills.
- Technological Evolution: Cybersecurity is ranked eighth in top challenges, with 73% rating it as very to critically important, though 26% of small systems report low to no ability to implement measures.
- Public Trust: Ranked fourth in top challenges, 60.6% of utilities have customer communication plans implemented or in progress, crucial for maintaining trust in an evolving media landscape.
Since 2004, AWWA has published the annual State of the Water Industry report based on survey results to help water utilities, service providers, regulators and researchers identify and prepare for challenges, opportunities and trends impacting the water community.
The full report and a corresponding executive summary are available on AWWA’s State of the Water Industry page.
Source: AWWA
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