While uncertainty looms over the long-term government spending forecast, vendors can expect purchasing by state, local and education (SLED) government agencies to continue to slowly and steadily increase.

Onvia’s recently released 2017 State & Local Government Contracting Forecast provides a profile of the purchasing environment for business and government for the next 12 months. We’ve uncovered unique insights that will help contractors and government officials understand and navigate the business-to-government (B2G) market in 2017.

Understanding The Market Direction

On a per person or per capita basis, the overall level of spending across SLED governments appears to be trending slowly, reliably upward. That number will likely remain higher than inflation - but it does not necessarily indicate growth on a per capita basis. Over the last 12 months the amount of per capita spending has remained more or less steady.

Annual per capita SLED agency purchasing

Preliminary trends based on the GDP forecast appears to support slow spending growth in general purchases and equipment. Yet there are a few factors that provide reason for optimism. One industry that should move in a positive direction is technology & telecom, which is expected to continue its recent trend of modest to strong growth. And with the incoming administration proposing an infrastructure plan of $1T, infrastructure spending is expected to provide a boost to the overall spending numbers – although few details are known about when that investment will occur.

Some industries in particular stand to benefit from a growth in infrastructure spending, including water & energy, architecture & engineering and construction.

Tight Budgets, Flattened Growth Rates

Last year, Onvia interviewed more than 550 government agency procurement staff to get their perspective on the current budgeting and purchasing environment. 58% of those surveyed expected their spending levels to stay the same over the coming year, 33% thought the level of spending would increase and only 9% expected to decrease their amount of purchasing.

Many of the procurement professionals surveyed expressed a strong desire to find more value and purchase more efficiently. A common issue mentioned was not having enough dollars to work with to purchase effectively.

To counter this, and in response to increasing fiscal pressures, agencies have begun buying in more non-traditional ways, such as buying off of existing contracts. This has led to the flattening of growth rates and the stabilizing of the number of bids and RFPs released – even as total purchasing dollars expand. A projected slight uptick in the general economy in 2017 should help steer those growth rates gently upward.

Full Report Contains Expert Insight and More

The full 2017 State & Local Government Contracting Forecast contains insights from experts on infrastructure, technology and government policy, as well as indispensable data from Onvia’s B2G Intelligence System (B2GIS). Request a copy of the report today to better understand the entire SLED purchasing landscape for 2017.

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