Germany’s water sector comprises 5,599 utility systems, including municipal operators, special-purpose associations, and a limited number of private and mixed-ownership entities. Together, they manage more than 62 million household and business connections, providing drinking water and wastewater services across a decentralized and regionally fragmented landscape.

Over 60% of pipelines, pumping stations, and treatment facilities predate 1990, and renewal rates remain low. Aging infrastructure is a concern nationwide: in the East, assets upgraded after reunification are nearing the end of their lifecycle, while in the West, older systems—especially in industrial regions—require growing maintenance.

Meanwhile, macroeconomic conditions are tightening. Rising costs for materials, energy, and labor have driven project budgets upward, while weak Gross Domestic Product growth (0.2% in 2024) and shrinking municipal finances are limiting capital planning. These financial headwinds are slowing project delivery and constraining responses to regulatory pressure.

On the other hand, utilities must also plan for stricter EU wastewater rules, including nutrient removal and per- and polyfluoroalkyl substances control. Added monitoring, leak reduction, and climate resilience requirements stretch resources further, often without the staff or funding to comply. The sector is now shifting from capacity expansion to renewal, digitalization, and efficiency.

This Insight Report offers a comprehensive analysis of the municipal water market in Germany including spend forecasts for municipal water management, wastewater management, and digital water services. The report also analyzes the outlook for the German water market, highlighting key policies, developments, and trends.