Onvia Releases 2010 Government Market Outlook

Expect 1 Million Stimulus Jobs This Year, and Stiff Competition Among Businesses for Government Contracts as the "Next Economy" Takes Hold

Jan 13, 2010, 08:30 ET from Onvia

SEATTLE, Jan. 13 /PRNewswire-FirstCall/ -- Onvia analysts are forecasting head-turning impacts on jobs and government contractors in 2010 as a result of federal stimulus spending initiatives, a full year after officials declared the package to have achieved its intended effect.  Onvia is the leader in business-to-government solutions and the creator of Recovery.org, a private sector initiative to give businesses transparency into recovery project spending.

"Onvia's research reveals the true impact of the stimulus is about to be realized," said Mike Pickett, CEO of Onvia.  "The spending will result in more than one million direct and indirect jobs created or saved in 2010, the impact of which has not yet been seen in the economy.  With only 25% of recovery funds paid out by the federal government in 2009, we will see the bulk of the remainder finally leave Washington and reach the contractors and subcontractors that create jobs."

"What's more, the competition for government contracts will be fierce as more businesses seek to capitalize on the irresistibly large market created by government spending.  At $5.5 trillion in 2010, government spending will be nearly half of GDP - an all time high.  Areas like infrastructure, energy, and Information Technology (IT) will benefit from plenty of government spending, but it will remain a buyers' market as more companies follow the money and competition keeps a lid on costs. Welcome to the 'Next Economy' - one in which government and businesses operate more closely," said Pickett.

Onvia collaborated with REMI, the recognized authority on economic models, to produce The Next Economy: 2010 Government Market Outlook.  Top line findings include:

  • 89,000 government entities in the United States will spend $5.5 trillion in 2010, nearly half of GDP and an all time high as a percentage of GDP.  Competition will be fierce among contractors and subcontractors as more look to this market as the only viable way to grow their businesses in 2010.
  • At the end of 2009, only 25% of the $275 billion in ARRA contracts, grants and loans had been paid out by the Federal government.  Onvia forecasts the creation or retention of 1.1 million direct and indirect jobs from ARRA contract spending in 2010 (vs. 460,000 in 2009).  Of these, Infrastructure projects will generate 900,000 direct and indirect jobs; transportation, 70,000; and energy projects, 110,000.  The Southeast region will see the most job activity, followed by the Far West and the Great Lakes regions.  
  • Infrastructure.  Of the more than 35,000 infrastructure projects tracked by Onvia in 2009, only 27% (9,500) had been awarded to contractors by the end of the year.   The $90.4 billion across 25,500 fully or partially recovery funded projects in the pipeline expected to begin in 2010 represents a meaningful leading indicator for the infrastructure market in the year ahead.  More than 900,000 direct and indirect jobs will be created by infrastructure projects.  The Southeast region will see the most infrastructure – related jobs, and the Great Lakes region will lead in average salaries.
  • Highways and Ports.  As of Jan 1, 2010, Onvia was tracking over 12,500 funded highway projects in the pipeline across the United States.  Onvia projects an increase in smart roads, or intelligent transportation system (ITS) projects, yielding significant savings for agencies and the traveling public.
  • Transit.  Unemployment has lowered ridership rates nationwide, lowering funding for transit systems. At the start of 2010, less than half of the approximately $7 billion for transit were under contract, signaling more spending this year. With an additional $8.4 billion in the pending Jobs for Main Street legislation, the prospect is strong for even more contract awards in this category.
  • Energy.  As of Jan 1, 2010, Onvia was tracking 2,700 energy-related initiatives funded by $13.5 billion in stimulus funds.  With $40 billion available for energy projects ranging from renewable energy to carbon capture, and more money anticipated from the pending Jobs for Main Street legislation, this sector will be a job generator.  The Southeast will receive the lion's share of jobs in this category.
  • Healthcare IT.  Grants for electronic health initiatives are expected to flow in earnest in the second half of 2010, setting up 2011 as a breakout year for this spending.  Roughly $2 billion in stimulus investments in healthcare IT will continue to be implemented in 2010, while the remaining $17 billion will be available as temporary incentive payments starting in 2011. Regional extension centers, health information exchanges, and demonstration projects are among the programs that will garner big stimulus investments.

"Government spending is at an all-time high and we do not see that changing in the foreseeable future," said Pickett. "We are witnessing the 'Next Economy' in which government more actively participates in business interests through regulation, direct ownership, contracting requirements, and other means.  For business, the debate isn't about the size of government, but rather how to engage in and influence this vast and growing market."

Anyone wishing to learn more about The Next Economy: 2010 Government Market Outlook can register at www.onvia.com for a free webinar, scheduled for January 19, 2010 at 11:00 a.m. Pacific / 2:00 p.m. Eastern.

About Onvia

For more than a decade Onvia has been the leading provider of Business-to-Government solutions in the United States, covering the broadest set of industries, projects and products at every level of government. Thousands of companies rely on Onvia's customized information services to grow sales opportunities, understand buyer and seller activities, and research markets. For information, call 1-800-331-2320 or visit www.onvia.com. To view Economic Recovery-funded projects tracked by Onvia, visit www.recovery.org.