CompTIA: Business Confidence Continues to Lag in IT Industry

The CompTIA IT Industry Business Confidence Index shows continued uncertainty about  IT spending, coming in at 57.9 on a 100-point scale compared to a 58.0 reading in Q2.

CompTIA is projecting a gain of 2.7 percentage points over the next two quarters. The study showed that an assessment of the overall U.S. economy continues to lag: 48.3 vs. 62.0 for the overall IT industry and 62.7 for respondents’ own company.

“While the ratings for the IT industry have held up well, the Index’s economy component continues to be hampered by stubbornly high unemployment, softness in certain industry sectors, overseas volatility and the unknown effects of Federal Reserve monetary policy,” said Tim Herbert, vice president for research and market intelligence at CompTIA.

At the midpoint of 2013, the smallest IT firms (fewer than 10 employees) voiced the most concern about business prospects. Forty percent of micro IT firms reported lagging revenue during the first half of the year, compared to 17 percent reporting revenue tracking ahead of goals.

Across technology companies of all sizes, 23 percent are tracking revenue ahead of goals for 2013. Firms in the 10-99 employee range were the most bullish (30 percent), followed by medium companies (21 percent) and large businesses (20 percent).

The Q3 Index also reveals IT industry executives are concerned about price-sensitive customers who may be hesitant to spend. Nearly half of the firms surveyed (48 percent) cited this as a concern over the next six months.

“CompTIA research consistently shows strong demand in many areas of IT hardware, software and services, so customer interest is there, but the confidence to make the investment may not always follow,” Herbert explained.

Additionally, IT executives express relatively high levels of concern over downward margin pressure (32 percent of companies surveyed); unexpected shocks, such as a natural disaster or spike in oil prices (32 percent); and government regulation (31 percent).

On the investment front, IT companies expect to boost spending over the next six months in two key areas: new products or business lines and staffing in technical positions, such as network engineers and app developers.

“These two areas of investment often go hand-in-hand,” Herbert noted. “Expanding into a new product category, such as big data, typically requires an investment in human capital as well, which may occur through new hires or training for existing staff.”

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