State Spotlight: Growth Prospects in Washington, D.C.

With $49 million in sales last year, the District of Columbia ranks among the smallest markets nationwide. Yet its 5.7% sales increase made it the fastest growing market in the East, as well as one of the fastest growing across the country.

While far from Silicon Valley, Washington, D.C., is emerging as one of the East Coast’s premiere hubs for technology startups. Forbes magazine in 2013 declared the area as the number-one new tech hot spot in the country, with more than 1,000 technology startups and growing. Business analytics firm RJMetrics named D.C. the fourth hottest startup city in 2014.

But it’s not just technology driving the business boom. The Beltway has attracted customers with deep pockets across a wide variety of industries, industry companies say.

“Why D.C.? There’s a lot of businesses and categories,” says Anu Kelly of Alinea Promos. “The tech companies that are in Tysons Corner and down Interstate 270 are growing. The companies in the D.C. area have bigger budgets to promote their name better. There’s a ton of money in the area, so the companies reflect that.”

Josh Frey, whose company On Sale Promos is based just outside D.C. in Falls Church, VA, says associations and the banking industry in D.C. are also spending money on promotional products. The federal government, too, remains a source of business, although spending cuts – as well as the red tape associated with selling to the government – can be a hindrance.

“The city’s rich, because you have the federal government,” says Frey. “All of the government contractors, the big ones and the smaller ones, have a presence here. You’ve got a huge pocket of associations here that lobby the government. Every tie-in to the government, the offshoots, they’re all entities that buy promotional items. This has been a pretty big market for selling our stuff, but fairly insulated as it relates to the ups and downs of the economy.”

Randy LeFaivre of D.C.-based MetroLogo says the 2016 presidential election also gave a boost to business. “We saw great sales here, and capitalizing on the whole ‘drain the swamp’ thing,” he says. “We’ve done a lot in the past couple months.”