SAN DIEGO -- The U.S. environmental industry recorded $181 billion in revenues in 1996, up only 1.2% over the previous year and the lowest annual growth ever posted, according to Environmental Business International Inc. Between 1991 and 1996, the industry has grown only 1-4% per year, following growth of 8-14% during the '70s and '80s.
Five business segments posted declines in 1996. Resource Recovery dipped a dramatic 15% due to slippage in commodity prices, and Analytical Services, Hazardous Water Management, and Consulting & Engineering sectors were down as a result of eroding market drivers for these traditional environmental service functions. Segments that fared best in this grim year were Water Equipment & Chemicals with 6% growth, Solid Waste Management, up 4.3%, and Water Utilities and Instrumentation at 4.2% each.
According to Grant Ferrier, president of EBI, an independent research and consulting company which publishes its annual industry review each year in Environmental Business Journal, "The environmental industry must radically reorient its products and services to meet the changing needs of its customer base, whether or not there is the much-needed substantial innovation in environmental policy. Unfortunately, 1996 mirrored previous years in its almost total absence of leadership in environmental policy reform likely to promote legitimate demand for environmental improvement by the regulated community. While the punitive regulation-based system has lost emphasis, incentive-based alternatives have not emerged, leading to a substantial decline in demand for environmental products and services. In the absence of coordinated reforms in environmental and economic policy, the market is still not engaged. Investment dollars will not ship unless there is a consistent economic consequence to unsustainable behavior."
Companies faring best are those exploiting economic drivers like U.S. Filter, Philip Services, and others that have transitioned from a focus on waste management towards resource management based on customer service and technology -- and used acquisitions to pursue that strategy.
The flat market at home has lead to greater investment in building international business. EBI research indicates that 60% of the $2.2 million revenue gain for the entire environmental industry in 1996 resulted from exports, which totaled $16 billion in 1996. The environmental industry now boasts a trade surplus of $9 billion. The U.S. environmental industry is comprised of 115,000 revenue generating entities (including public sector water utilities and treatment works) and employs more than 1.33 million Americans.
EBJ's Annual Industry Overview contains market size, growth projections, and analysis for 14 environmental industry segments through 2000; revenue distribution data by media; revenues, exports, and employment by state; and a breakdown of U.S. environmental industry exports and trade balance by segme
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