A new outlook from Bluefield Research indicates the municipal pipe sector in the U.S. and Canada is entering an investment cycle centered on renewal and rehabilitation, rather than network expansion. The firm’s report, U.S. & Canada Municipal Drinking Water and Wastewater Pipe Forecasts, 2026–2035, projects US$99.3 billion in capital expenditures across the decade. The forecast ties the shift in priorities to an aging installed base, a slowdown in housing construction relative to 2021 peaks, and evolving material preferences among utilities and developers.
According to the analysis, total annual CAPEX across drinking water distribution and wastewater collection systems is expected to increase gradually from US$9.07 billion in 2026 to US$10.88 billion by 2035. Within that total, rehabilitation and repair are forecast to grow much faster than new construction, nearly doubling their share of overall investment from 9.7% to 19.8%. Bluefield notes that distribution and collection mains collectively represent roughly 45% of utility capital spending, making shifts within this category especially consequential for manufacturers, contractors, distributors, and engineering firms that serve utilities.
Drivers of the renewal trend include the advancing age of infrastructure and a large installed footprint estimated at 4.52 million miles of pipe across the two countries, with about 94% in the U.S. and 6% in Canada. As assets approach or exceed design life, utilities are converting condition data into rehabilitation and replacement programs at a faster pace. The report also observes that deferred planning often results in higher emergency repair and operating costs, reinforcing the case for proactive condition assessment and capital planning.
Material selection is undergoing a sustained shift. Bluefield projects polyvinyl chloride (PVC) will increase its share of total spend from 31.9% to 34.5% over the forecast horizon, while ductile iron’s share is expected to decline from 30.3% to 25.9%. Specialty plastics, such as high-density polyethylene (HDPE) and molecularly oriented PVC (PVCO), are gaining from smaller bases at quicker rates. The analysis attributes these movements to installation labor comparisons, corrosion resistance, and maintenance considerations that favor plastics in many growth markets, alongside continued reliance on ductile iron in some large urban systems. Tariff volatility adds uncertainty to material cost outlooks.
Geographically, the market is bifurcated between regions that offer scale and those posting above-average growth. Texas, California, and Florida together anchor roughly 28% of U.S. spending because of their size and ongoing development, while markets including Wisconsin, Utah, and British Columbia are projected to grow faster than 3% annually, above the overall market average near 2%. The Northeast and Midwest tend to have older, legacy iron networks, whereas the South and West have younger, plastic-heavy systems whose shorter asset lifecycles could bring earlier-than-expected replacement needs.
Bluefield characterizes the coming years as a decade defined by utility execution and portfolio alignment. Federal funding streams supporting water infrastructure have been less transformative for this segment than initially expected, in part due to rollout timelines at the state level and competing priorities that include emerging contaminant management such as PFAS. Funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act is tapering as planned, leaving utilities to rely more heavily on rate adjustments and other financing instruments to sustain rehabilitation programs.
The firm’s market view suggests suppliers emphasizing rehabilitation technologies, wastewater infrastructure solutions, plastic piping systems, and larger-diameter transmission projects are well positioned. While a rebound in housing starts and stability in material costs could influence annual spending dynamics, the replacement need stemming from an extensive, aging network remains the underlying driver. Vendors and contractors that pair financing flexibility with advanced condition assessment tools and proven delivery capacity are expected to be most competitive as utilities advance long-term renewal plans.
