SLED Professional Services Market, 2022-2025
Published: July 15, 2022
State, local, and education (SLED) demand for professional business and financial services will grow from $45.7 billion in 2022 to $48.1 billion in 2025 at a compound annual growth rate (CAGR) of 0.7%.
The forecast growth rate of 0.7% is below the previous forecast’s CAGR due to an unexpected lag in pandemic recession impact. However, the market is now expected to bottom out from its pandemic-induced impacts in 2023 and rebound through 2025, likely surpassing the previous 2020 market high in 2026. This expectation is in keeping with a similarly anticipated rebound in SLED market professional services bid volumes.
The SLED Professional Services market is not longer driven by immediate post-pandemic concerns. This is evidenced by the governors' recent agendas, which have seen a surge in policy items with relevance to professional services. These include 1) Licensing reciprocity, 2) Performance improvements and accountability measures, 3) Reform & Reorganization and social justice measures, and 4) Streamlining & Modernization. Each of these requires multi-year efforts and extensive reengineering and best practices support.
Most states and localities have been surprisingly slow in finalizing their plans for spending their shares of funding from the American Rescue Plan Act (ARPA) stimulus. They are also engaged in the early stages of receiving and spending Infrastructure Bill (IIJA) funds. These funding streams will be important backstops to SLED spending as a recession looms. They also include Biden administration goals for equity related to “disproportionately impacted communities” along with outcomes-based justifications for spending plans. These elements call for potential support from professional services contractors with expertise in these areas.
This Deltek forecast details SLED Professional Services spending across four major industry segments, including 1) Financial Investment, 2) Activities, Accounting, Tax Preparation, Bookkeeping, & Payroll Services, 3) Management Consulting, and 4) Business Support Services. It also includes six major buyer segments, including 1) Educational Services, 2) Hospitals, 3) Other Government Services, 4) Electric Utilities, 5) Passenger Transit, and 6) Other Enterprises.
Introduction (slides 6-13)
*Scope and Methodology
*Description of Industry Segments
Market Forecast (slides 15-35)
*Total Addressable Market
*Impact of ARPA
Analyst's Takes (slides 37-38)