IT Confidence Index Finds Some Concern

Susan Hall

Gartner and IDC both recently boosted their projections of IT spending for 2011. Gartner raised its global forecast for the year to $3.67 trillion, up 7.1 percent from last year's $3.43 trillion while IDC said U.S. IT spending will rise by 5.6 percent in 2011. My colleague Paul Mah reported that small shops are spending as well as the big companies.

 

A Computerworld story last week, however, quoted IT experts worrying about the weak economy, the debt crisis and how that might affect spending. HP CEO Leo Apotheker was quoted, saying that big companies are "a bit wary" about spending, though they have technology upgrades under way.

 

The obvious question is how this anxiety about the economy will affect spending and how that will affect hiring, especially in light of a Wall Street Journal survey that ties the reticence to hire on lack of customer demand rather than government policies.

 

The latest CompTIA IT Industry Business Confidence Index, released Monday, had some bright points, but also found that wariness. The Q3 index fell 2 points to 52.9 on a 100-point scale, the same spot as in Q3 and Q4 of 2010. But the gap between confidence levels in the IT industry and the U.S. economy widened to 18 percentage points this quarter, making the spread 5 percentage points more than in the previous quarter and the largest gap in more than a year.

 

According to Tim Herbert, vice president for research at CompTIA:

The tech sector is doing well for the most part, as demand remains relatively strong for IT hardware, software and services. ... An element of fatigue has set in with regard to the overall economy and people are less confident about the future. Everyone wants to be optimistic, but the economy continues to tread water, which affects forward-looking expectations.

In fact, 58 percent of those surveyed cited a stalled recovery as the greatest threat to business activity over the next six months, up from 49 percent in Q2. But on the bright side:

 

  • 87 percent of IT firms plan to increase or maintain their levels of investment in new products and business lines.
  • 88 percent plan to increase or maintain technology spending levels.
  • 72 percent plan to maintain or increase current staffing levels.
  • Medium-sized IT firms are the most likely to hire new staff.

 

We know that the IT job market looks far different than the job market in the overall economy. We also know that companies more than ever are looking to technology to gain efficiency and find new markets. So that work will go on, making IT a good place to be. As Herbert also said:

IT companies must invest in new solutions, such as cloud computing, mobility technologies and workplace efficiency applications to meet the needs of tomorrow's customers.


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