CompTIA IT Industry Business Confidence Index Reveals Increasing Concern over Government Gridlock
DOWNERS GROVE, Ill., Oct. 11, 2013 /PRNewswire-USNewswire/ -- The CompTIA IT Industry Business Confidence Index remains essentially unchanged for Q4, but concerns about government gridlock took a sharp upswing in the survey from CompTIA, the non-profit association for the information technology (IT) industry.
The Index came in at 58.1 on a 100-point scale for Q4, compared to readings of 57.9 in Q3 and 58.0 in Q2. The forward-looking component of the Index, a measurement of technology business sentiment, projects a gain of 2 percentage points over the next two quarters.
One notable change occurred in sentiment about the overall economy. It fell 1.1 percentage points in Q4, the first decrease in over a year.
"Up until this point, IT industry executives viewed the economy as progressing steadily towards stability and modest growth," said Elizabeth Hyman, vice president, public advocacy, CompTIA. "A portion of the concern can certainly be attributed to the impasse in Washington and the shutdown of the federal government."
Concern over government action (or inaction) and its impact on the overall economy jumped from 31 percent in Q3 to 42 percent in Q4.
"One in four IT companies does regular business with some branch of government," Hyman noted. "The federal government alone purchases more than $80 billion in technology each year, so the effect of a shutdown directly impacts the bottom line of these companies.
"There's also the potential for a longer-term impact if federal departments and agencies are unable to plan for and allocate current and future IT resources," she added. "The technology companies and workers they're doing business with will be in limbo, too. There will be hesitancy to hire people."
Outside of the government procurement process many tech SMBs rely on federal financing through the Small Business Administration. The processing of these loans may be delayed."
Customer Demand Concerns
On par with the previous quarter's Index, 49 percent of IT industry executives expressed concern over price sensitive customers reluctant to spend money on technology products and services.
"Realistically, after a prolonged period of economic sluggishness, it will take a period of sustained economic strength for customers to fully regain their confidence in longer-term capital or operational investments," said Tim Herbert, vice president, research and market intelligence, CompTIA.
CompTIA's IT Industry Business Confidence Index is comprised of three metrics: opinions of the U.S. economy, the IT industry and one's company. Data for the Q4 Index is was collected through an online survey of executives at 334 IT companies conducted during early October. The full report is available at no cost to CompTIA members. Visit comptia.org or contact firstname.lastname@example.org for details.