Government to continue spending on "shovel-ready" construction
President-Elect Barack Obama’s economic stimulus package outlines a significant increase in federal spending on “shovel-ready” construction of roads and bridges, 21st-century school projects, healthcare IT, and modernization of energy-inefficient government facilities. In response, states and municipalities are prioritizing their initiatives based on the greatest short-term impact to their respective regions, according to a new report released today by Onvia.
Onvia’s 2009 Government Market Outlook summarizes findings of a recent survey of more than 4,000 government executives, managers, and purchasing officials at state, local, and educational purchasing offices, and reflects anticipated opportunities from the economic stimulus package. The survey lookedat projected spending activities in government agencies throughout the country and across the categories of infrastructure, technology, and business services.
Overall government spending
20% of officials project an increase in government spending activity across 2009.
25% expect levels to remain the same as 2008.
55% expect spending activity to decrease in 2009.
Public safety and infrastructure ranked as top priorities.
Investment in “shovel-ready” infrastructure projects will be a primary objective, with education, technology, and energy efficiency initiatives also prioritized.
State and Local
25% of county entities report they will increase spending activities in 2009.
Overall, state and local leaders are somewhat optimistic about 2009 as details of President-Elect Obama’s Federal stimulus package emerged. Many government agencies at the city, state, and county levels have prepared and prioritized lists of the projects in their jurisdictions deemed to have the greatest short-term impact.
57% of educational organizations plan to maintain or grow their spending activity over 2008 levels.
74% expect to maintain or increase technology buying activity, with 68% planning to maintain or increase spending on construction services and building materials, with the goal to create 21st-century school buildings.
Overall, 61% of government agencies plan to maintain or increase spending activity on infrastructure in 2009.
59% of government agencies plan to increase or maintain spending on architecture and engineering services.
57% of government agencies plan to increase or maintain spending on construction services and building supplies.
In contrast, 51% of state agencies plan to decrease their spending on construction services and building materials.
Last year, “green” initiatives such as energy efficiency climbed 25% over 2007 as agencies pushed to modernize and reduce operating expenses. This trend is expected to continue as aging government buildings are retrofitted to meet modern day standards.
U.S. Government spending activity levels have increased over the past two years, and the majority of agencies report they will maintain or grow their investments in technology initiatives for 2009.
As a result of the prospective federal economic stimulus plan, government leaders revised their 2009 projections upward, and now approximately 80% expect to spend the same or more on hardware, software, services, and telecommunications, versus less than 65% prior to stimulus discussions.
Technology companies stand to gain from the purchases of new computers for classrooms, nationwide integration of electronic medical records and expansion of broadband services to rural areas.
The financial services segment will slow its increased spending projections from 2008 and largely attempt to preserve current levels, with 53% of agencies anticipating maintaining 2008 levels into 2009.