Recyclers Lead U.S. Environmental Industry to $312 Billion

06 October 2011

Led by the recycling industry, the U.S. environmental sector as a whole is recovering ahead of the economy, but growth is still slow and industry leaders have tempered expectations for Q3 and Q4.

According to the Environmental Business Journal's Annual Industry Overview, the U.S. environmental industry grew 3.1% in 2010 to an estimated $312 billion - based on industry surveys and in-depth interviews with leading executives and experts in the field.

The growth in 2010 was a welcome relief following 2009's 1.7% decline in the aftermath of the global financial crisis - the worst year ever recorded since EBJ started tracking the environmental industry in 1988.

Ongoing economic uncertainty has caused environmental executives to adjust their outlook for 2011: An EBJ survey of environmental executives conducted in February forecast average growth of 7.4% for 2011, but just a few months later, an August survey revised that figure to 4.8%.

However, survey respondents also predicted improving growth rates for 2012. 'The general consensus is that the work is there and recovery is coming; it is just a matter of when and where the money is coming from,' said Grant Ferrier, president of EBI Inc., the publisher of EBJ.

According to the report, the Resource Recovery segment led growth in the U.S. environmental sector through 2010, with revenues up nearly 18%.

EBJ says that it was the best year for a long time for recyclers of metals, glass, plastics, and paper, although construction and demolition (C&D) waste suffered from the lack of construction activity. Rising commodity prices rather than increased volumes are said to be behind the strong performance.

Meanwhile, diversification proved to be key for the Hazardous Waste segment, up 4% in 2010. According to the report some of the leading players now get less than half their revenue from the traditional hazardous waste treatment and disposal businesses.

By contrast, the worst performer in 2010 was Clean Energy Systems & Power, a segment that had enjoyed robust annual growth of 30% to 50% between 2005 and 2008. The sector declined by 8% in revenues in 2010 as wind installations in the U.S. halved from 10 GW in 2009 to 5 GW last year.

However, according to the report environmental projects in the clean energy sector are expected to recover to 20% - 40% sales growth in 2011 - 2014.

When asked how margins were holding up in 2011, 25% of survey respondents saw no significant change from 2010, while 40% are enjoying increased margins and 35% are seeing decreases. On average a 0.2% gain is reported.


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