Survey: Stimulus proposals ‘brighten otherwise dim prospects’ for government budgets

In response to the economic downturn, state and local governments and education agencies are tightening their belts. Even so, an economic stimulus package could help generate increases in federal infrastructure spending, 21st century school projects and modernization of government facilities.

Those are some of the findings from Onvia’s “Government Market Outlook 2009,” which summarized responses to a recent survey of 2,400 government administrators, managers and purchasing officials at state, local and educational purchasing offices.

More than half (55 percent) of the survey respondents said they expect spending activity in their entities to decrease in 2009. These officials, however, are somewhat more optimistic about 2009 as details of the federal stimulus plan emerge.

Public safety and infrastructure, survey respondents indicated, will be top priorities in their governments.

The report noted a few areas of growth, including:

• 57 percent of responding educational organizations plan to maintain or grow their spending activity over 2008 levels.
• 25 percent of county entities that responded report they will increase spending activities in 2009.
• Almost 40 percent of responding agencies in the South Central region of the United States predict increased purchasing activity levels for 2009. Telecommunications, information technology and software are areas of spending growth for 2009, reported South Central respondents.
• 40 percent of responding special districts plan to spend more on infrastructure projects in 2009; more than half of responding special districts (53 percent) expect to spend more on operations and maintenance services in 2009.
• Governments will expand their use of electronic procurement and cooperative purchasing practices to help drive down costs.

“Looking ahead into 2009, the massive scale of the upcoming federal economic stimulus package has helped to brighten otherwise dim prospects,” said Michael Balsam, chief solutions officer at Onvia. “Rebuilding the nation’s transportation systems along with investments in technology will spearhead spending priorities for government agencies as they continue with modernization plans. Even with unclear economic indicators, government at all levels will continue to spend on essential services and invest in the future at cautious but still substantial levels, and this presents many opportunities in what will be a highly competitive landscape for companies that want to secure government contracts.”