Government at all Levels Will Continue to Spend on Essential Services and Invest in the Future, According to Onvia Study

Posted by editor on January 8th, 2009

45 Percent of Government Officials Expect to Maintain or Increase Spending Activity in 2009, With the Focus on Construction of Roads and Bridges, Creation of 21st Century Schools and Modernization of Energy-Inefficient Government Facilities

SEATTLE—January 8, 2009—President-Elect Barack Obama’s economic stimulus package outlines a significant increase in federal spending on “shovel-ready” construction of roads and bridges, 21st-century school projects, healthcare IT and modernization of energy-inefficient government facilities. In response, states and municipalities are prioritizing their initiatives based on the greatest short-term impact to their respective regions. This is according to a new report released today by Onvia (Nasdaq: ONVI), the leading provider of business-to-government solutions in the United States, covering the broadest set of industries and products at every level of government.

Onvia’s 2009 Government Market Outlook, available at http://www.Onvia.com/2009outlook, summarizes findings of a recent survey of more than 4,000 government executives, managers and purchasing officials at state, local and educational purchasing offices, and reflects anticipated opportunities from the economic stimulus package. The survey looked at projected spending activities in government agencies throughout the country and across the categories of infrastructure, technology and business services.

Highlights from Onvia’s 2009 Government Market Outlook include the following:

Overall Government Spending

20 percent of officials surveyed project an increase in government spending activity across 2009.
25 percent surveyed expect levels to remain the same as 2008.
55 percent expect spending activity to decrease in 2009.
Public safety and infrastructure ranked as top priorities.
Investment in “shovel-ready” infrastructure projects will be a primary objective, with education, technology and energy efficiency initiatives also prioritized.

State and Local

Overall, state and local leaders are somewhat more optimistic about 2009 as details of President-Elect Obama’s Federal stimulus package emerged; however, none are expecting intervention by the Federal government to be a silver bullet. Many government agencies at the city, state and county levels have prepared and prioritized lists of the projects in their jurisdictions deemed to have the greatest short-term impact.
25 percent of county entities report they will increase spending activities in 2009.

Education

57 percent of educational organizations plan to maintain or grow their spending activity over 2008 levels.
74 percent expect to maintain or increase technology buying activity, with 68 percent planning to maintain or increase spending on construction services and building materials, with the goal to create 21st-century school buildings.

Infrastructure

Overall, 61 percent of government agencies plan to maintain or increase spending activity on infrastructure in 2009.
59 percent of government agencies plan to increase or maintain spending on architecture and engineering services.
57 percent of government agencies plan to increase or maintain spending on construction services and building supplies.
In contrast, 51 percent of state agencies plan to decrease their spending on construction services and building materials.
Last year, “green” initiatives such as energy efficiency climbed 25 percent over 2007 as agencies pushed to modernize and reduce operating expenses. This trend is expected to continue as aging government buildings are retrofitted to meet modern day standards.

Technology

U.S. Government spending activity levels have increased over the past two years, and the majority of agencies report they will maintain or grow their investments in technology initiatives for 2009.
As a result of the prospective Federal economic stimulus plan, government leaders revised their 2009 projections upward, and now approximately 80 percent expect to spend the same or more on hardware, software, services and telecommunications, versus less than 65 percent prior to stimulus discussions.
Technology companies stand to gain from the purchases of new computers for classrooms, nationwide integration of electronic medical records and expansion of broadband services to rural areas.

Business Services

The financial services segment will slow its increased spending projections from 2008 and largely attempt to preserve current levels, with 53 percent of agencies anticipating maintaining 2008 levels into 2009.

“Looking ahead into 2009, the massive scale of the upcoming Federal economic stimulus package has helped to brighten otherwise dim prospects,” said Michael Balsam, chief solutions officer at Onvia. “Rebuilding the nation’s transportation systems along with investments in technology will spearhead spending priorities for government agencies as they continue with modernization plans. Even with unclear economic indicators, government at all levels will continue to spend on essential services and invest in the future at cautious but still substantial levels, and this presents many opportunities in what will be a highly competitive landscape for companies that want to secure government contracts.”

On January 13 and 14, Onvia will be hosting webcasts with recognized government experts, including the Former Executive Director of the Utah Department of Transportation and the Former CIO of the State of New York, discussing the impact of and opportunities expected from the economic stimulus package. For more information and to register, visit http://www.Onvia.com/stimuluswebcast.

To receive a copy of Onvia’s 2009 Government Market Outlook, visit http://www.Onvia.com/2009outlook.

About Onvia
Onvia (Nasdaq: ONVI) is the leading provider of business-to-government solutions in the United States, covering the broadest set of industries and products at every level of government. More than 8,000 companies rely on Onvia’s customized information services to grow sales opportunities, understand buyer and seller activities and research markets. In addition, government agencies across the country use Onvia to automate their purchasing departments, resulting in increased competition, broadened access to more qualified suppliers and reduced costs. Onvia was founded in 1996 and is headquartered in Seattle, Washington.

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