Survey says: Few expect cutbacks in state and local procurement activity

In the “2008 Onvia Government Procurement Outlook,” the market intelligence firm summarizes the findings of a January 2008 survey of 1,400 local, state and education purchasing officials across the United States.

“Our findings are good news for many businesses selling to the government,” said Michael Balsam, vice president of products and services at Onvia. “Government spending for infrastructure should continue to help compensate for the residential construction downturn. Based on our research, the other big opportunities for 2008 will be for information technology vendors and companies selling to the educational sector.”

The Onvia survey findings mirror data in Government Product News’ 2008 “Keating Report,” which noted, “Public officials and policy analysts are predicting a robust course for government budgets and spending as we move toward the November 2008 elections.” The report cited a Global Insight prediction that local, state and federal purchases of goods and services will rise from $2.74 trillion in 2007 to $2.84 trillion in 2008. To view the “Keating Report,” click here.

Among the highlights in Onvia’s government procurement forecast:

• Forty-three percent of buyers project an increase in government spending activity for 2008.
• Thirty-seven percent of buyers expect levels to remain the same as 2007.
• Government infrastructure and construction procurement are projected to grow, which will benefit businesses such as architects, engineers and companies providing building products and construction services. Overall, 41 percent of agencies surveyed said that they plan to increase spending activity on infrastructure in 2008 and 38 percent said that they plan to maintain current spending activity levels.
• IT procurement continues to accelerate, in keeping with modernization plans and security and privacy initiatives. According to survey respondents, 82 percent of agencies will increase or maintain IT procurement activity for hardware and for telecommunications, while 83 percent will increase or maintain IT procurement for software and services.
• School districts responding to the survey are preparing for the largest year-over-year government spending activity increase compared to other segments, while municipal governments facing revenue shortfalls said that they will spend more cautiously than other segments.
• The South Central United States anticipates the most growth in government spending activity, while New England expects more moderate growth rates.

The Onvia 2008 procurement outlook report received a positive review from the National Institute of Governmental Purchasing (NIGP).

“Overall, it is a very impressive report,” NIGP CEO Rick Grimm said. “It does a great job of looking at the diversification of the various sectors—both by geography and by agency type.”

Download the survey from the Onvia Web site.