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Procurement Trends and Economic Indicators 2012

Explore the key trends and influences in public procurement for 2012, including economic indicators, budget outlooks, professional developments, cooperative practices, and succession planning. Understand values, guiding principles, and standards of practice shaping the industry.

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Procurement Trends and Economic Indicators 2012

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  1. Public Procurement Outlook 2012 Presented by Brent MaasNIGP Marketing Director

  2. Key Trends and Influences • Economy • Indicators & Outlook • Federal, State & Local Budgets • Professional Developments & Dynamics • Values, Guiding Principles, Standards of Practice • Cooperative Practices • Technology • Succession Planning • Education & Certification

  3. Indicators & Outlook: Energy Price Avg. Consumption: 0.6% U.S. v. 1.6% Worldwide Source: U.S. Energy Information Administration – Price Summary Table Source: U.S. Energy Information Administration – International Energy Outlook 2011

  4. Manufacturing Production: 2.8% Total Industrial Production: 1.9% Food Production: 0.9% Resins & Synthetics Production: 1.2% Agricultural Chemical Production: 1.5% Real Disposable Personal Income: 1.6% Consumer Price Index: 1.8% Indicators & Outlook:Reference Indices 2012:2011

  5. Indicators & OutlookU.S. Sensitivities Financial Tight credit & bond markets Debt Foreclosures and housing Catastrophe funding Political Congressional discord Presidential election Sustained 9+% Unemployment

  6. Financial Bond Markets Euro-zone Chinese monetary policy Rebuilding Japan Supply chain Mid-East Social & Political Change Indicators & OutlookGlobal Sensitivities

  7. Federal Budget FY11-15 Estimates Source:www.usgovernmentspending.com andwww.usgovernmentrevenue.com- compilation of data from the president’s “Budget of the United States Government” and US Census Bureau’s “Statistical Abstract of the United States”

  8. Federal Budget FY11-15 Trends & Influencers Average revenue growth – 7.1% Average expense growth – 2.8% Total est. cumulative deficit FY11-15 $15.5T $19.8T ( 27.8%) Total est. GDP $15.1T $18.8T ( 24.7%)

  9. The good news… General fund revenues exceeded forecast 2 years running (FY11 $322M) Corporate taxes & estimated payments $165.8M (58%) Individual income tax, refunds & sales tax 5% growth in payroll withholding & sales tax Unemployment 6.5% v 9.1% (U.S.) (top 36%) Personal income up 2.8% Less surplus real estate properties than most states Indicators & OutlookVirginia FY10-FY11 Overview Source: (VA) House Appropriations Committee Staff, “General Fund Revenue Collections for Fiscal Years 2011 and Preliminary Budget Outlook for 2012-14, August 8, 2011.

  10. The cautionary notes… General fund revenues not yet back to FY08 level 5% growth lagging (payroll withholdings) 8% growth emerging from 1991 recession 7.2% growth emerging from 2001 recession 6.1% long-term growth trend 5.4% growth lagging (sales tax) 7% growth emerging from 1991 recession 14% growth emerging from 2001 recession Indicators & OutlookVirginia FY10-FY11 Overview Source: (VA) House Appropriations Committee Staff, “General Fund Revenue Collections for Fiscal Years 2011 and Preliminary Budget Outlook for 2012-14, August 8, 2011.

  11. The cautionary notes… Consumer Price Index up 3.9% Labor & housing market soft Slow-nominal income growth Indicators & OutlookVirginia FY10-FY11 Overview Source: U.S. Bureau of Labor and Statistics, Major Economic Indicators Reports – “Consumer Price Index;” “Employment Situation;” “Real Earnings.” October 7-19.

  12. Employment - 2% growth Leading sectors: business & professional services, hospitality, education Trailing sectors: construction, information, financial Personal Income – 3.6% growth Wages & Salary – 4.7% growth Indicators & OutlookVirginia FY12 Source: Virginia Department of Taxation (Governor’s Confidential Working Papers), “The Economic Outlook And Revenue Forecast through Fiscal Year 2014.” November 22, 2010.

  13. Housing Starts = +1,400/month avg. (+50% of pre-recession peak) Appreciation 3.9% Fuel Price 3-4% Consumption Gasoline – stable/slight decline Diesel 1.5% Indicators & OutlookVirginia 2012 Source: U.S. Energy Information Agency, “Short-Term Energy and Winter Fuels Outlook.” October 2011

  14. Virginia Budget Revenue (forecast) General Fund: $15.5B Non-General Fund: $23.6B Expense General Fund: $16.3B Non-General Fund: $23.0B Source: “Part A-Overview: Executive Amendments to the 2010-2012 Biennial Budget.” December 17, 2010.

  15. Professional Developments & Dynamics Values & Guiding Principles

  16. Professional Developments & Dynamics Standard Practices www.principlesandpractices.org Public Procurement Policy ManualOpen for public comment thru November 18 Risk Management Cooperative Purchasing Strategic Planning Performance Metrics Performance Measurement Performance Management

  17. Cooperative practices Technology implementation Succession planning – workforce demographics Education and certification Professional Developments & Dynamics

  18. Public Procurement Outlook 2012 Presented by Brent MaasNIGP Marketing Director

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