Survey: State and Local Government Procurement Activity Expected to Stay Level or Increase

Despite a slowing economy and projected local budget shortfalls, 80 percent of purchasing officials plan to maintain or increase government spending activity in the year ahead compared to 2007, reports a new survey from Onvia, a provider of comprehensive market intelligence.

The 2008 Onvia Government Procurement Outlook, summarizes the findings of a January, 2008 survey of 1,400 purchasing officials at state, local and educational entities.
"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."

"Overall, it is a very impressive report," said Rick Grimm, CEO of National Institute of Governmental Purchasing, Inc. (NIGP). "It does a great job of looking at the diversification of the various sectors -- both by geography and by agency type." NIGP is a nonprofit providing education and technical assistance to public purchasing agencies.

Highlights from the Onvia Government Procurement Outlook include:

• 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; 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 say they will spend more cautiously than other segments.
• 43 percent of buyers surveyed project an increase in government spending activity across 2008.
• 37 percent of buyers surveyed expect levels to remain the same as 2007.
• Government infrastructure and construction procurement will grow, which will benefit businesses such as architects, engineers, and companies providing building products and construction services. Overall, 41 percent of agencies plan to increase spending activity on infrastructure in 2008 and 38 percent plan to maintain current spending activity levels.
• The South Central U.S. region anticipates the most growth in government spending activity, while New England expects more moderate growth rates.