Onvia Predicts Job Growth and Increased Government Spending Transparency in 2011

$5.5 Trillion Government Market will Continue to Spur Economic Recovery

Dec 28, 2010, 09:00 ET from Onvia

SEATTLE, Dec. 28, 2010 /PRNewswire/ -- Onvia (Nasdaq: ONVI), the leading provider of gBusiness solutions and the creator of the stimulus-tracking website Recovery.org, predicts that the government will remain a significant catalyst for economic recovery in the coming year as stimulus dollars continue to reach states and cities. This prediction, along with a report on the stimulus' impact in 2010, is included in Onvia's 2011 Government Market Outlook Report, released today.

2011 Government Market Outlook Report: http://onvia.com/sites/default/files/pdf/2011_gmor.pdf

Onvia's report includes the following findings on government spending during 2010:

  • The American Recovery and Reinvestment Act (ARRA) – Nearly two years after the act's passage, just 30 percent of the stimulus money allocated to ARRA projects has reached the contractors and subcontractors that perform the work and create private-sector jobs.
  • Job Creation - Over 800,000 private-sector jobs were supported at least in part through stimulus-related projects in 2009 and 2010, but the majority of these jobs were temporary.
  • gBusiness Trending - Government spending is approaching 50 percent of GDP, a level not seen since World War II.
  • Outsourcing – Government-agency outsourcing increased by 25 percent in 2010.
  • Cost of Goods Purchased - The influx of companies turning to government contracting as a source of revenue has driven down the prices of the goods and services purchased by government agencies. Over the course of 2010, government-contract values declined to just 45 percent of budget estimates, which has been devastating to small businesses in particular.

Onvia expects that 2011 will be a strong year for government contracting at all levels, and that transparency in government spending will continue to improve. In addition, Onvia predicts that job creation will be the primary focus of policy efforts and discretionary federal spending decisions in 2011.

With the exception of an anticipated double-digit drop in transportation spending in cities, 2011 spending by government agencies at the state and local levels is expected to be only marginally changed compared with 2010 spending. Here are the projections for public-sector investments in three key industry sectors:

  • Transportation - According to the American Road & Transportation Builders Association, 2011 public-sector spending on highways, roads and bridges will total $78.5 billion, down 4.4 percent from the 2010 estimated investment of $82.2 billion.
  • Technology – The government will continue to invest in information technology with a growing focus on healthcare-related technologies. In terms of general technology investments across all levels of government, the highest priority initiatives in 2011 will be those that further energy efficiency, cost savings and transparency.
  • Clean Energy - The public-sector markets will continue to advance green energy investments in 2011, especially those that are less capital intensive.

"The $5.5 trillion government marketplace will continue to be a source of revenue and growth for many thousands of businesses in 2011 and beyond," said Hank Riner, president and CEO of Onvia. "This spending, coupled with unprecedented transparency and a political imperative for more effective deployment of government dollars, means businesses of all sizes should take the gBusiness market seriously."

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About Onvia

For more than 12 years Onvia (NASDAQ: ONVI), the gBusiness Innovator, has been successfully delivering the research, analytics and tools companies rely on to succeed in gBusiness – the intersection of business and government and a $5.5 trillion market. Onvia tracks, analyzes and reports the spending of more than 89,000 federal, state and local government agencies, giving companies a single source for conducting open, intelligent and efficient business with government. Along with providing an exclusive suite of integrated business tools for a wide variety of industries, Onvia offers DemandStar, the automated system that streamlines agency procurement processes, and Recovery.org, a free website that tracks Recovery Act-funded projects. For information about Onvia visit www.onvia.com.