Only 60% of water utilities are confident they can serve large industrial customers

Sixty percent. That is the share of U.S. water utilities that now say they are confident they can serve large industrial customers, according to Black & Veatch's 2026 Water Report, and two years ago it was 73%.

The report, released June 9 and now in its 15th year, draws on a survey of more than 600 U.S. water industry stakeholders, according to the company's announcement distributed by Business Wire. Aging infrastructure again topped the list of challenges, as it has across recent editions. But the industrial confidence number is the one that reaches past the utility fence line.

For a manufacturer or process operator scouting land for a water-intensive plant, that is a changed condition. The utility on the other side of the table is less sure than it was in 2024 that it can say yes.

A drop from 73% to 60%, and what Black & Veatch says sits behind it

WaterWorld reported that Black & Veatch attributes part of the decline to growing demand from water-intensive industries alongside ongoing supply challenges. Confidence stood at 73% in 2024 and 60% in 2026, according to Business Wire. The report does not describe any specific case of a utility turning away an industrial connection, and nothing in the survey suggests one has happened.

What it does suggest is that industrial demand is now competing with everything else a utility has to fund and staff. Donnie Ginn, executive vice president of Black & Veatch's Integrated Water & Environmental Business, said in the announcement that utilities are being asked to do more than ever, with reliable supply in the face of growing scarcity as the most important job. He framed integrated planning as the route to more resilient systems.

For operators with expansion plans in regions where supply is already tight, the practical read is that water availability belongs in site-selection conversations at the same stage as power, and this year's number gives a reason to start those conversations earlier. WaterWorld noted that the 2025 edition of the same report had already flagged emerging water demand tied to AI and data centers. The 2026 confidence figure indicates that pressure has not eased.

Capital has moved ahead of the rulebook

Asked for their single overall top challenge, 31% of respondents chose funding and availability of capital, according to the Business Wire announcement. Nineteen percent chose increasing or expanding regulation. Black & Veatch reads that as cost pressure outranking regulation as the sector's core pressure point.

The forward-looking number is starker. Forty-five percent of utilities say funding will not be sufficient to meet capital needs over the next five to 10 years, per both WaterWorld and the announcement. The report does not say which funding mechanism is short, whether rates, grants or bond capacity, so the 45% is a signal of scale rather than a diagnosis.

There is academic backing for the idea that capital and operations, not compliance, are where the risk now sits. An open-access chapter published in February 2026 in Springer's Safe Drinking Water Act volume argues that the contaminant-by-contaminant regulatory approach does not directly address aging infrastructure and workforce shortages, and it recommends setting minimum expectations for water system operations and resilience. That is context, not part of the survey, but it lines up with respondents ranking capital ahead of regulation.

For an asset manager trying to win budget for renewal work against a more visible capital project, the 66% of peers naming aging infrastructure as a top challenge is a citable benchmark. So is the 45% capital shortfall figure. A utility that ranks funding above regulation is, in effect, telling its board that the constraint is money, not the rulebook.

More utilities name staffing than name pipes

Seventy-one percent of utilities cite staffing as a barrier to operations, according to WaterWorld and the announcement. That is a higher share than the 66% naming aging infrastructure as a top challenge. The two questions are worded differently, so the ranking is not direct, but in a report whose headline is about pipes, people are the barrier more respondents point to.

The report does not break down whether that reflects retirements, an inability to hire, or the overtime load on the operators who remain. What the figure indicates is that the utility side of any capital program is short of the people needed to plan, run and maintain whatever gets built. That is the plant manager who gets the call at 2 a.m. and has fewer people to send.

Black & Veatch's answer, per the announcement, is collaborative delivery and lifecycle strategies that align planning, design, construction and operations. For an engineering firm or contractor selling into utilities, that is a demand signal for delivery models that move labor off the owner's payroll. For a utility, it is a reason to evaluate alternative delivery on staffing grounds and not only on schedule or cost.

Plenty of data, little of it used

Seventy percent of respondents say they collect sufficient operational data. Only 19% say they use it effectively, according to the Business Wire announcement. WaterWorld described the gap between the two as a divide between data collection and actionable decision-making.

That reframes a common procurement decision. If a utility is weighing another round of sensors against analytics, integration and workflow tools, the survey suggests the shortfall is on the use side, not the collection side. The sharper question for a vendor pitch becomes what the platform does with the data already flowing in.

Cybersecurity and resilience round out the priorities. Nearly all respondents rate operational technology cybersecurity investment as important or very important, and 68% have completed a vulnerability study for at least some part of their system, per the announcement. Sustainability is a stated priority for 79%.

What the 2026 survey settles and what it leaves open

The report is a survey of industry stakeholders, not a census of utilities, and every figure is self-reported. It gives no incident rate or budget figure behind the cybersecurity finding, does not name which funding stream is coming up short, and does not tie the industrial confidence drop to any particular customer type or region.

What it does establish is direction. Cost pressure has passed regulation as the challenge utilities rank first, staffing is named by more respondents than aging assets, and the share of utilities confident about big industrial loads fell from 73% in 2024 to 60% in 2026, according to Black & Veatch.

Black & Veatch, the Overland Park, Kansas, employee-owned engineering and construction firm founded in 1915, has posted the full report at bv.com. The number to watch in next year's edition is the industrial confidence figure: another decline would indicate the 2024-to-2026 move is a trend, while a recovery would suggest utilities have absorbed the demand that worried them this year.