Top 10 State and Local Contracting Growth Hotspots for 2023

Deltek’s GovWin IQ platform offers unparalleled insight into the state, local and education (SLED) government contracting market. Every year, the research team behind this platform dives into the data to find the fastest-growing areas of SLED contracting opportunity, which we’ve compiled in our latest report, 10 Hotspots in State & Local Government Contracting for 2023.

This latest research report highlights the top areas for vendors to provide products and services to state, local and education government agencies, plus additional analysis of some of the top-level themes across industries.

Below, we’ve outlined some of the key findings from this report, shared the methodology behind the Hotspots, and share next steps for government contractors who want to grow their business in the SLED government contracting market.

The Hunt for State and Local Government Hotspots

In order to identify and select the 10 Hotspots for 2023, the expert State and Local government research team supporting GovWin IQ first analyzed all 4,000+ of our Smart Tags that automatically track demand for bidding opportunities by very specific industry niche areas. They then assemble clusters of related fast-growing tags to measure and properly capture growth for meaningful trends in certain categories.

Government Market Returning to Business as Usual

The state and local contracting market showed clear signs of returning to normal in 2022 which our current hotspots reflect. This year’s report looks at a 2022 market that returned to the closest “business as usual” full year since the pandemic began. It examines the role of recent non-pandemic social and economic trends, as well as federal stimulus on purchasing and priorities for advertised bidding opportunities.

Major Themes in State and Local Government Contracting

This year’s 10 Hotspots are associated with three major themes that are widely acknowledged in current society, government and the business world. This includes “protecting the public”, “protecting the environment” and “focusing on the buying process”.

These three themes of government spending are ways that governments are directly responding to some of the biggest issues they face today. Governments are investing more in initiatives to improve SLED public safety related functions due to political pressure and societal influences. As climate change is a finite race against time, recent federal stimulus bills have offered further incentives for governments to mitigate greenhouse gases and invest in renewables. Finally, there is inflation, which has affected every corner of the market to some extent, but construction has seen direct impacts with higher building and material costs. Governments are seeking innovative ways to mitigate these pressures.

Here are three major themes and examples that Deltek state and local government market researchers have identified for 2023:

1. Protecting the Public
   Tools to benefit and protect the public such as robotics, social equity and support services, emergency planning, mental health services, improved HVAC systems, and increase in defense against threats to digital and physical security.
2. Protecting the Environment
   Mitigating greenhouse gas emissions via preserving nature areas, conduct climate studies, monitor air pollution and energy consulting services.
3. Focusing on the Buying Process
   Buying high priced materials directly to cut costs and the growth of design/build in order to cut costs and improve efficiency.

The full Hotspots report includes dedicated analysis for each Hotspot including a discussion of the major factors driving demand, quotes from industry publications and experts, and a geographic map showing the top ten states by volume of opportunities.

To download a complimentary copy of our report 10 Hotspots in Government Contracting for 2023, click the link below and you’ll receive expert analysis from Deltek that can help inform your public sector sales strategy.