SLED Professional Services Market, FY 2021-2024
Published: July 30, 2021
State, local, and education (SLED) demand for professional business and financial services will decline from $50.2 billion in FY 2021 to $53.1 billion in FY 2024 at a compound annual growth rate (CAGR) of 0.07%.
The SLED Professional Services market reached an all-time high in spending of $52.5 billion in FY 2020, followed by an expected drop to $49.7 billion in FY 2022. During the COVID-19 pandemic-related disruptions when government agencies moved to remote work environments and laid off/furloughed workers, professional services procurements dropped precipitously. Thus, with a rapid increase in professional services bids in early 2021, it will take two years for spending levels in this market to return to normal.
NOTE: Currently, the prospects for passage of federal "human infrastructure" spending as included in the American Families Plan (AFP) remain too tenuous to incorporate that spending into this forecast. If that legislation passes, it would likely lead a rebound of the professional services market in FY 2022, particularly in the areas of health care, social services, and public safety.
In lieu of major new federal spending, the SLED Professional Services market will be driven by immediate post-pandemic concerns, including 1) increased telework in government operations and 2) reinventing mass transit. Other major drivers will originate from the governors' post-pandemic agendas, including a major surge in interest in business process reengineering (BPR) in the areas of Licensing reciprocity, Performance improvements and accountability measures, 3) Reform & Reorganization and social justice measures, and 4) Streamlining & Modernization..
Currently, most states and localities are using the first half of the American Rescue Plan Act (ARPA) stimulus funds to backfill their general fund budgets and eliminate cuts from the pandemic economic lockdowns. The next tranche of funding becomes available in March, 2021, and should lead to funding of more new projects, assuming that revenue streams return to pre-pandemic levels as expected.
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 6-12)
*Purpose of This Report
*Scope & Methodology
Market Forecast (slides 15-39)
*Total Addressable Market
*Assumptions from Previous Forecast
*Impact of ARPA
*Major Market Transitions
*PS & IT Agendas
Analyst's Takes (slides 41-42)