Water is on course to be scarcer than oil by 2030 as demand outstrips water supply by 40 per cent leading to a doubling of revenues for the global water services industry by 2020, a new report from the United States says.

The Bank of America Merrill Lynch research report called A Blue Revolution-global water is based on the collective views of 35 analysts, covering 60 companies from 18 countries.

By 2030 close to half of the world’s population will be living in water-stressed areas, the report said.

Insufficient freshwater, uneven distribution and climate change are factors limiting the supply of water, while demand is growing in homes, businesses and farms around the world.

Unless more sustainable water management practices are adopted, 45 per cent of projected 2050 global GDP at 2000 prices could be at risk – equal to $63 trillion.

“By addressing the issue of water scarcity, companies can reduce the likelihood of social unrest and trans-boundary disputes,” Sarbjit Nahal, equity strategist at BofA Merrill Lynch said.

“Together with our sector analysts, we are setting out in this report the 60 global stocks covered by BofA Merrill Lynch Global Research that are best-positioned to lead in addressing more sustainable water use and to more closely match supply with demand.”

The report outlines three themes of addressing water scarcity including: water treatment, water management, and water infrastructure and supply. It identifies companies that have the greatest exposure to the megatrend of scarcity.