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At the start of every year, Onvia’s market research team compiles a look-ahead for the coming 12 months, as we did in this year’s 2018 State & Local Government Contracting Forecast.

The report combines statistical analysis with expert viewpoints to provide a comprehensive view of state, local and education contracting for 2018. It also calls out several tips for sales and marketing professionals who want to get a jump start on their year by mastering the markets they sell to.

Below we’ve called out some key findings about how 2018 is likely to look in the government contracting marketplace, all of which can help get you get the information you need to increase your sales to the government.

Half of Government Contractors Expect More Business to be Available

In October of 2017, Onvia conducted a nationwide survey of nearly 300 government contractors, including those that supply products and services to federal, state, local and education government agencies. This was a follow-up to our survey of government contractors in early 2017. Our October survey found that most respondents had tempered their expectations for how much government business they were going to be able to generate.

Even with a more realistic outlook, 51% of contractors surveyed still expected to see more potential business available to go after in 2018. Another 40% predicted that the coming year would give them about the same amount of government business as they found in 2017.

2018 Total Amount of Government Business Available

Overall State Market Difficult to Predict for 2018

In October of 2017, Onvia conducted a nationwide survey of nearly 300 government contractors, including those that supply products and services to federal, state, local and education government agencies. This was a follow-up to our survey of government contractors in early 2017. Our October survey found that most respondents had tempered their expectations for how much government business they were going to be able to generate.

Krista S. Ferrell, the Deputy Director for NASPO (National Association of State Procurement Officials), agrees. She pointed out that states will see wildly different rates of growth depending on a number of economic factors, including Medicaid spending, human services projects and technology expansion.

At this point, it is difficult to predict as states are vastly divided into those who are experiencing growth and those facing budget cuts due to loss of tax revenues.

Krista S. Ferrell, Deputy Director for NASPO

Slow, Continued Growth Expected in Local Government Spending

Local government is expected to see more growth in government bids and RFPs through 2019, a growth trend that was temporarily halted during the uncertain months leading up to the 2016 presidential elections and the “catch-up” period in early 2017 that followed. “Expect revenue and expenditure growth at a rate similar to or slightly above inflation,” says Brent Maas, Executive Director for Business Strategy and Relationships at NIGP: The Institute for Public Procurement.

The model that Onvia’s research team used expects growth rates in 2018 to be slightly more moderate than they were during an extremely strong 2017, although the total number of bids will still be large enough that government contractors should be able to find plenty of opportunities from city and county governments.

Part of the near-term reduced growth rate can be attributed to cyclical forces rather than underlying weakness in the economy or actual reduced demand within the SLED marketplace.

Paul Irby, Market Analyst for Onvia

Slight Drop in Education Bids & RFPs in 2018; Growth in 2019

The forecast for education-related government agencies is similar to that of local government. A slight slowing in growth rates might occur during 2018, but towards the end of the year and heading into 2019, the market is expected to pick back up and offer even more government contracting opportunities.

“We see a fairly steady amount of state and local funding being devoted to K-12 in state and local budgets,” said Sean Cavanagh, senior editor for EdWeek Market Brief. So d espite the current political climate and the uncertainty at the federal level, the need for spending on education products and services is a constant one.

The information in this article originally appeared in Onvia’s 2018 State and Local Government Contracting Forecast. You can download a complimentary copy of the report below:

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