$13 trillion – the global market for public procurement

Public procurement is a major market in the world. National and local governments outsource by necessity because they lack the skills and scale to satisfy their needs in goods or services. The actual figure in global procurement spend is elusive, however, because of varying degrees of consistency around reporting and publication.

Spend Network tackled this challenge and estimated the world’s public procurement spend. We did so using a combination of research, data linking and refinement, and statistical modelling. We have built upon the earlier model of $9.5trn public procurement spend and, through our methods, found $13 trillion US dollars. 

Our research shows that over $10 trillion or 77% of the total is spent by 17 countries. China is by far the largest procurer at $4.2 trillion. The US by contrast spends less than half of this at $1.8 trillion. 15 countries spend between $100bn and $1trn per annum. These are:

  • Japan,
  • Germany,
  • India,
  • France,
  • United Kingdom,
  • Indonesia,
  • Argentina,
  • Canada,
  • Italy,
  • South Korea,
  • Australia,
  • Brazil,
  • Netherlands,
  • Russia and,
  • Spain

By contrast the rest of the world spends just over $2 trillion per annum.

Do any factors link to public procurement spend?

We found that there are strong and positive correlations between public procurement spend and:

    • GDP,
    • GNI PPP,
    • Military expenditure, and,
    • Revenue, excluding grants

How we did this

In order to establish what the current state of information is, we gathered existing data from sources such as the World Bank, IMF, OECD and government sources.

We also gathered a number of national metrics tracked and maintained by the World Bank such as GDP, GNI, Military Spend, Tax Revenue, Total Debt Service, Statistical capacity, HCI.

In order to create a model, countries were banded based on GDP. This was done to provide a more refined model of spend that better reflected inter-country difference and capture like for like economies. GDP was chosen because it had the strongest correlation with Procurement Spend. For countries where we did not have data, we applied the regression model. This gave a total public procurement spend of $13trn per annum.

 

Our research in charts

Below, we give a preview into our research, showing what public procurement spend around the world looks like.

BRICs = Brazil, Russia, India and China

EU28 = All 28 members of the European Union at the time of writing: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom

Latin America = Argentina, Bolivia, Colombia, Chile, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Mexico, Panama, Paraguay, Peru, Uruguay

 

What does $13 trillion look like?

Y-axis scale in trillion

Red line denotes $13trn

All figures are for 2018 

Source for US’ national debt

https://www.treasurydirect.gov/govt/reports/pd/mspd/2018/opds122018.pdf

Source for European Union’s GDP

https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=EU-US-CN

 

How the world compares in public procurement spend

 

3 (green) =  >$500bn 

2 (blue) = <$500bn, =>$100bn 

1 (yellow) =  <$100bn

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