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Survey points to increased government spending for infrastructure

SEATTLE—Despite a slowing economy and projected local budget shortfalls, 80 percent of purchasing officials plan to maintain or increase government spending activity in 2008, compared with 2007, according to a 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."

Highlights from the Onvia Government Procurement Outlook include the following:

  • Forty-three percent of buyers surveyed project an increase in government spending activity across 2008. Thirty-seven 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.
  • 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 with other segments, while municipal governments facing revenue shortfalls say they will spend more cautiously than other segments.
  • The South Central U.S. region anticipates the most growth in government spending activity, while New England expects more moderate growth rates.

The 2008 Onvia Government Procurement Outlook is available at www.onvia.com.