Before you spend months chasing a type of government work, it's worth asking one blunt question: is there actually money in it — and is that money growing or drying up? Most small businesses never check. They find a contract, bid it, and repeat, with no idea whether they're fishing in a river or a puddle. You can answer it in a minute, for free, using the government's own spending data. Here's how.
The short answer
Every federal contract dollar is public. The government reports what it buys, from whom, under which industry code (NAICS), on USAspending.gov. Add those dollars up by your industry and you get three things that should shape where you spend your time:
- Market size — how much the government actually spends in your industry.
- The trend — whether that spending is rising, steady, or shrinking.
- Who funds it — the agencies doing the buying, and whether their spending is going up or down.
The federal government awards well over half a trillion dollars in contracts a year (USAspending.gov), and by law it targets 23% of eligible dollars to small businesses (SBA). But that money is not spread evenly — some industries and agencies are growing fast while others are being cut. Knowing which is which is the difference between a smart pursuit and a slow way to lose.
Why "market size" matters more than one contract
A single open contract tells you almost nothing about the opportunity. A $2M solicitation in a shrinking, one-buyer niche is a worse bet than a $200k one in a $50-billion, growing market with a dozen agencies buying. The first is a dead end; the second means repeat work, recompetes, and buyers with budget to spend.
So before you invest in a niche — a new certification, a hire, a proposal library — check the size and direction of the money behind it. It reframes the whole decision from "can I win this contract?" to "is this a market worth building a business in?"
How to read federal spending by NAICS
Your NAICS code is your industry's label in the federal system (if you're unsure which is yours, see what a NAICS code is). USAspending lets you filter spending by NAICS, so you can total obligations for your industry over time. What you're looking for:
- Annual total — the size of your federal market.
- Year-over-year direction — three or four years of totals side by side. Is the line going up or down?
- Concentration — is the money spread across many agencies (healthy, more chances) or dependent on one (fragile)?
- Top agencies — which departments actually buy your work, so you know who to build relationships with.
The same data powers our Federal Buyer Map, which ranks the offices that buy what you sell. Spending trends tell you the size and direction; the buyer map tells you who.
The trap that fools almost everyone: reporting lag
Here's the mistake that makes DIY spending analysis dangerous, and almost nobody warns you about it: the most recent year of data is always incomplete.
Federal award reporting lags. Contracts get entered, modified, and back-dated over many months, so the current fiscal year — and often the one before it — are still filling in. If you compare last year's partial numbers to a complete year, every industry looks like it just fell off a cliff. You'll conclude your market is collapsing when it's simply not fully reported yet.
The fix is simple but essential: only trend over complete fiscal years. In practice that means ignoring the current fiscal year and the one just before it, and comparing the complete years behind them. A trend built on complete years is honest; a trend that includes the current year is noise dressed up as a signal.
(A "fiscal year" for the federal government runs October 1 to September 30. So work done in, say, November 2025 counts toward fiscal year 2026.)
Turn the trend into a decision
Once you have an honest read, use it:
- Rising market, several agencies buying → a strong place to invest. Build past performance here, get on the recompetes early, and deepen relationships with the growing buyers.
- Steady market → reliable, but expect real competition. Fine to compete in; lean on your differentiators and any set-aside you hold.
- Shrinking market → be careful. Don't sink months into a niche where the budget is trending down. If you're already there, look for the adjacent NAICS where the money is moving.
- One-agency market → treat it as fragile. A single budget cut or a lost recompete can erase most of the opportunity. Diversify the agencies you pursue.
None of this means avoid every shrinking niche — sometimes a declining market still has a set-aside pocket you can win. It means going in with your eyes open, spending your scarcest resource, time, where the money is actually moving.
Where AskTuvo does this for you
Reading USAspending by hand works, but it's slow, and it's easy to get the fiscal-year math wrong. AskTuvo's Spending Trends tool does it in one step: enter your industry and it shows your federal market size, the spend broken out by year, the trend (rising / steady / shrinking), and the agencies funding your work — each with its own trend — all built from the public award data and trended only over complete fiscal years, so you never get fooled by a fake cliff.
Pair it with the Buyer Map to see who to reach, and Buyer Radar to catch the opportunities early. Spending trends tell you where to point; the rest help you act.
FAQ
How much does the government spend in my industry?
It depends entirely on your NAICS code — federal spending ranges from a few million a year in narrow niches to tens of billions in big industries like IT services and construction. The exact figure is public on USAspending.gov; AskTuvo's Spending Trends tool totals it for your industry automatically so you don't have to build the query yourself.
Where does federal spending data come from?
USAspending.gov — the U.S. government's official public record of federal spending, required by law. It reports contract obligations by recipient, agency, and industry code. It's free and open; the work is in aggregating it and reading it correctly.
Why does my industry look like it's shrinking?
Almost always because you're including the current fiscal year, which is incomplete — reporting lags by many months. Compare only complete fiscal years and the "drop" usually disappears. This is the single most common mistake in DIY federal spending analysis.
Is a bigger market always better?
Not by itself. A large market with heavy competition and one dominant winner can be harder than a smaller, open one. Read spending alongside competition and set-aside data — how many bidders show up, and how much is reserved for small business. Size tells you the opportunity; competition tells you your odds. See how to know if you can win.
How often should I check spending trends?
A couple of times a year is plenty — federal spending shifts slowly, and complete-year data only updates once a year. Check when you're deciding whether to enter a new niche, pursue a new agency, or invest in a certification.