IoT-based smart water supply network management applications generate a huge volume of data from the installed sensing devices which are required to be processed (sometimes in-network), stored and transmitted to a remote centre for decision making. When the volume of data produced by diverse IoT smart sensing devices intensify, processing and storage of these data begin to be a serious issue. The large data size acquired from these applications increases the computational complexities, occupies the scarce bandwidth of data transmission and increases the storage space. Thus, data size reduction through the use of data compression algorithms is essential in IoT-based smart water network management applications. In this paper, the performance evaluation of four different data compression algorithms used for this purpose is presented. These algorithms, which include RLE, Huffman, LZW and Shanon-Fano encoding were realised using MATLAB software and tested on six water supply system data. The performance of each of these algorithms was evaluated based on their compression ratio, compression factor, percentage space savings, as well as the compression gain. The results obtained showed that the LZW algorithm shows better performance base on the compression ratio, compression factor, space savings and the compression gain. However, its execution time is relatively slow compared to the RLE and the two other algorithms investigated. Most importantly, the LZW algorithm has a significant reduction in the data sizes of the tested files than all other algorithms