CompTIA IT Industry Business Confidence Index Takes Small Step Back in Q2

Index remains solidly in positive territory as IT executives expect business climate to hold steady

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Apr 27, 2015, 09:13 ET

DOWNERS GROVE, Ill., April 27, 2015 /PRNewswire-USNewswire/ -- The CompTIA IT Industry Business Confidence Index took a small step back in Q2, halting several quarters of positive momentum. The Q2 Index slipped 1.3 points to 63.2 on a 100-point scale.

The index is based on IT executives' opinions of the U.S. economy, the IT industry and their own company. It is produced by CompTIA, the IT industry association.

All three components of the Index experienced modest declines in Q2, with the overall economy rating experiencing the biggest drop (2.3 points).

Even with the dip the Index remains solidly in positive territory, with a far greater percentage of positive business sentiment opinions than negative or neutral opinions.

"The forward-looking component of the Index projects a slight increase, suggesting IT industry executives expect the business climate to hold steady over the next two quarters," said Tim Herbert, vice president, research and market intelligence, CompTIA.

"The IT Industry Business Confidence Index generally reflects what I am observing in our regional market," said MJ Shoer, founder, president and virtual chief technology officer, Jenaly Technology Group, Portsmouth, N.H. and chairman of the CompTIA Board of Directors. "Our business outlook remains strong, with many of our clients continuing to adapt their technology to maintain their market competitiveness."

The majority of IT companies – 75 percent – report being on track or ahead of their sales goals through Q1. The remaining 25 percent of firms report lagging behind their sales goals year to date; a factor likely contributing to the slight fall off in the overall Index.

"With three-fourths of IT companies meeting or outperforming their sales goals, it should be viewed as a good sign that most continue to see strong customer demand for technology," noted Herbert.

Analysis of the survey data by company size reveals a few key differences.

Micro-size IT firms (fewer than 10 employees) have a slightly more bearish view of the economy and their company's business prospects.

"This may stem from greater sensitivity to fluctuations in the economy or their customer base," Herbert said.

Large IT firms (500 or more employees) also report slightly less positive business sentiment. Although top business concerns revolve around the usual economic factors or margin pressures, one factor that is increasingly cited is concern over the rapidly strengthening U.S. dollar relative to other currencies. Among large publicly traded tech companies, many are generating upwards of half of their sales internationally.

"Even with currency hedging, heavy exposure to currency fluctuations may challenge even the most sophisticated firms," he said.

CompTIA's IT Industry Business Confidence Index for Q2 is based on an April 2015 online survey of executives at 290 U.S. IT companies. The complete report is available at http://www.comptia.org/resources/it-industry-business-confidence-index-q2-2015.

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SOURCE CompTIA