Government Industry Trends

February 6, 2012
Industry Intelligence from First Research, a division of Hoover's (a D&B company)

Changing Employment Landscape - Employment at all levels of government has grown in recent years; the number of state and local government employees increased more than 4 percent between 2004 and 2009. Likewise, the Bureau of Labor tatistics (BLS) projects that the number of employees in the federal government will rise nearly 10 percent from 2008 levels by 2018. This picture for state and local governments is less certain, though fluctuating responsibility at the state and local government level for what were federal services could increase the need for skilled employees.

Amount of Debt Held by Foreign Countries Increasing - The amount of US debt held by foreign investors has steadily increased in recent years, particularly since the federal government's fiscal stimulus packages during the late 2000s recession. The amount of foreign debt grew nearly 20 percent between 2009 and 2010. Most foreign debt is held by China, which eclipsed Japan in September 2008 as the US' single largest foreign debt holder.

Population Driving Service Needs - As the US population ages and moves around, the need for government services changes. A primary reason that healthcare expenses are projected to account for 25 percent of GDP by 2025 is that the "baby boom" generation will soon be reaching the age for Medicare eligibility. The same aging effect will drive Social Security to consume a higher portion of GDP in the near future as well. For state and local governments, population shifts can change service needs dramatically. The 65-and-over population is expected to rise 80 percent by 2030, further adding to
service needs.