What does 2013 hold for the waste industry?

Before the Christmas break the Environment Minister predicted waste sector growth of around 3% for 2013 in a response to a parliamentary question. This figure actually comes from a study looking at the wider environmental goods and services sector commissioned by BIS. On the face of it, with the wider economy expected to continue to struggle to deliver growth, this looks like good news for the waste industry. Is it accurate?

If we assume that volumes and prices remain flat next year then a circa 3% growth in sector turnover would look about right to me. The landfill tax escalator should force continued switching from landfill to recycling at the margin, while some new residual waste capacity will come on stream for the municipal sector.

These figures are of course heavily dependent on assumptions about volumes and prices. It would only take an across the board drop in volumes of a few percent for total sector turnover to be reversed in 2013. This is of course not the green growth message that the sector wants to portray but is an outside possibility if difficult trading conditions persist again in the forthcoming year. More realistically though we would expect recycling volumes to rise again and if global commodity markets can continue to demonstrate a reasonable resilience then 2013 should hopefully not be as tough for industry participants as 2012.

I am personally feeling mildly optimistic about 2013 (all these things are relative though I suppose). I think that we should see the Green Investment Bank starting to deliver on providing finance for large-scale residual waste projects (rather than the small AD deals we have seen so far), which should brighten the medium-term outlook for the industry. I also hope that we are through the worst of the wider macro-economic difficulties which should help to hold up recyclate prices after some of the falls earlier in 2011/2012.

The industry has been through a difficult period these past couple of years, and it is likely that conditions will remain extremely challenging. Hopefully, though, we are through the worst and by the end of 2013 will be looking forward to better times ahead.