Contractors have increased confidence in the government market
Following an election year filled with uncertainties, companies selling to the public sector have increased confidence in their expectations for sales growth in 2017-18. That’s one of the findings from Onvia’s third annual survey of government contractor sales expectations. The report is a guide to vendor sentiment on the government marketplace. The firm provides government sales intelligence in the business-to-government (B2G) marketplace.
A total of 424 companies who sell to federal, state, local and education agencies participated in this year’s study. Their responses indicate how contractors expect to perform over the next 12 months compared with their self-reported performance over the last 12 months. The combined results were used to calculate the 2017 Onvia Government Contractor Confidence Index (GCCI), which set a new record high score at 135.8, up 5 percent from 2016.
The Onvia GCCI is a single, balanced, composite metric that describes the overall confidence that government contractors have in their ability to grow their public sector sales over the next 12 months. The GCCI is based on a 0-200 scale where 0 means “extremely low confidence,” 100 means neutral (neither higher nor lower) and 200 means “extremely strong confidence.” At 135.8, the GCCI score for 2017 demonstrates increased contractor confidence. Scores above 100.0 generally point to an expanding market for contractors.
“The 2017 GCCI provides a view into why government vendors are feeling optimistic about their prospects for increased sales,” said Paul Irby, B2G Market Analyst. “The 5 percent increase in this year’s score was driven most notably by 21 percent growth in the expectation for increased overall agency spending and 8 percent growth in those expecting funding to expand in specific departments.”
The GCCI is constructed using four survey questions about public sector sales growth and the impact of agency budgets on their sales. The index components include:
• Next 12 months: Expected change in sales
• Next 12 months: Outlook for overall agency budgets
• Next 12 months: Outlook for individual agency department budgets
• Last 12 months: Reported change in sales
Expanding Agency Budgets and an Improving Economy Support Increased Go-to-Market Investment
The 2017 results show a vendor community that is expecting to grow their public sector sales revenues over the next 12 months. Comments supporting this positive outlook tended to focus on increasing public sector sales and marketing investment as a result of expanding agency budgets and the effects of an improving economy. Participating vendors shared the following perspectives:
• “We are aggressively marketing our services to additional agencies.”
• “We are pursuing government work that we did not focus on previously.”
• “We have increased our sales staff for this segment of the market.”
• “We are always improving our outreach to government entities and hopeful that this continues to pay off in term of sales.”
• “Agencies are increasing spending in some areas, and in other areas there is increased outsourcing to reduce cost where budgets are constrained.”
• “While there is certainly uncertainty in the air, overall there is a sense of confidence in the economy that I believe will translate into more tax revenue and larger budgets.”
Learn what companies have to say about their public sector sales expectations for the coming year by requesting a complimentary copy of the report here.