Many in industry see federal, state and local governments as the last customers standing in the down economy, and that's good news for agencies, according to a report released today by the market research firm Onvia.

Onvia projects that 75 percent of the $275 billion set aside for contract, grant and loan-funded American Recovery and Reinvestment Act projects remains to be spent in 2010, the first full year of stimulus spending. With federal, state and local government spending expected to top $5.5 trillion this year — through Recovery Act and other spending — the government market will account for 50 percent of gross domestic product, according to the Onvia report, "The Next Economy."

As a result, government will dominate the marketplace, particularly in infrastructure, energy and technology sectors, and competition for government business will skyrocket, the report said.

"It will remain a buyers' market as more companies follow the money," the report said. "In 2010 it is incumbent on every business to evaluate its position in the government marketplace, not just for survival as was the case in 2009, but rather to avoid being competitively disadvantaged in their industry."

Increased competition for contracts awarded in 2009 drove down prices the government paid for infrastructure and other projects, said Michael Balsam, chief solutions officer for Onvia, during a Web briefing on the report. Savings from competition may be tempered in 2010, however, as the costs of construction materials rise with the recovering economy, but the deals will still be good because of the level of government investment, he said.

Among the expected stimulus spending:

• More than $90.4 billion in the infrastructure sector for more than 25,000 road, bridge and transit projects.

• $13.5 billion for 2,700 energy projects to modernize cities with smart grid technology and green buildings and to develop renewable energy sources.

• $80 billion in the technology sector for broadband, energy and health care technologies.

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