Executive Summary - Highlights and key takeaways from Q1 2026:

• The SLED market posted a -6.4% decline in total bid and RFP volume for Q2, a sharper contraction than Q1's -4.2% dip and the steepest quarterly drop in the past two years.
• Education led the decline by a wide margin, down -12% year-over-year, nearly double the rate of state (-6.3%) or local (-4.9%) government. This marks a clear break from Q1, when all three levels of government moved in near lockstep.
• The divergence tracks closely with a year of turbulence at the federal level: funding freezes, proposed Department of Education cuts, and an ongoing fight over whether K-12 programs move to the Department of Labor have left school districts negotiating budgets under a level of uncertainty SLED agencies generally haven't faced.
• Technology & Telecom (-13.3%) and Environmental Services (-12.1%) were the weakest-performing industries this quarter; while Professional Business Services (-0.4%) came the closest to holding flat, a signal that agencies are still spending on the expertise needed to navigate a genuinely unusual regulatory and budget environment.

Market Snapshot

If Q1 was a story of broad, shared caution across SLED, Q2 is a story of that caution splitting apart and hitting education hardest. Total bid volume fell to roughly 116,000, down from Q2 2025's high of nearly 124,000, a -6.4% year-over-year decline that erased almost all of the modest recovery the market had built in Q1.

The decline tells only part of the story this quarter. Education stood out from the rest of the market, pulling back more sharply than either state or local government, while those two levels of government held closer to the kind of steady, cautious pace that's come to define this economic stretch. Education's dip lines up with a genuinely turbulent year for school funding, one marked by delayed federal dollars, shifting budget proposals, and an ongoing conversation in Washington about how K-12 programs should be funded and overseen going forward. The good news is that most of that funding ultimately came through. But a year of uncertainty naturally makes districts a little more cautious about committing to new projects until things settle, and that caution is likely what we're seeing show up here. As clarity returns, there's good reason to expect education procurement to find its footing again.

SLED Project Counts Over Time - Total Volume and Annual Rate of Change in Bids & RFPs:

• Bid volume naturally ebbs and flows with the seasons, and this quarter leaned toward the ebb side after Q1's promising rebound. Dips like this are a normal part of the market's rhythm and often set the stage for the next upswing.
• Bid activity came in about -6.4% below this time last year, making for a quieter quarter overall, a reminder that growth rarely moves in a straight line, and quieter stretches are often followed by renewed activity.

 

Agency Snapshot – Historical Trends 

• Where Q1 2026 showed state, education, and local moving within a percentage point of each other, Q2 altered that alignment. Education declined -12%, its worst reading in the two-year series and a sharp reversal from the relative stability it showed for most of 2025.
• State slipped further into negative territory at -6.3%, consistent with states like Idaho and Illinois publicly instructing agencies to submit "maintenance-only" budgets and hold spending in reserve against further federal cuts.
• Local held the most steady of the three at -4.9%, roughly in line with its Q1 reading, a reminder that local governments, while squeezed by cost-shifting from federal Medicaid and SNAP changes, are still managing that pressure without the same volatility hitting education.

Quarterly Growth Industry Ranking – Q2 2026

We looked deeper into activity by industry. This analysis divides the market into 12 distinct sectors, as defined in the glossary. Growth rates (ranging from -0.4% to -13.3%) are based on change in bid volume in Q2 ‘26 versus the same quarter one year ago.

Industry Growth Ranking by Level of Government - Annual Growth Rates In Bids/RFPs (Q1 ’26 vs Q1 ’25)

• The cross-government breakdown shows just how differently this downturn is landing depending on who's buying. Water & Energy ranks #1 within education specifically; even as overall education bid volume collapsed, school districts are still prioritizing facility infrastructure and energy projects over most other categories.
• Construction ranks #1 within local government, reinforcing that roads, public buildings, and core infrastructure remain a local budget priority even as agencies pull back elsewhere.
• Professional Business Services ranks #1 within state government; a pattern that fits neatly with what state budget officials have been saying publicly all year: navigating new federal compliance and cost-shifting requirements is, in itself, generating demand for outside expertise, even in a down market.
• Perhaps most notable: Educational Products & Services ranks #2 for both state and education buyers, but drops to #11 for local government; a sign that even within a shared national downturn, the three levels of government are prioritizing very different things right now.