CompTIA IT Industry Business Confidence Index Takes Step Back in Q3

Jul 18, 2012, 10:15 ET from CompTIA

DOWNERS GROVE, Ill., July 18, 2012 /PRNewswire-USNewswire/ -- Renewed uncertainty about global economic conditions outweighed more positive sentiments about prospects for the information technology (IT) industry in the latest CompTIA IT Industry Business Confidence Index, the quarterly survey from the leading non-profit association for the IT industry.

The index slipped 2.2 points in Q3, falling to 54.5 on a 100-point scale. By comparison, the Q2 reading of 56.7 was the highest level in more than a year. The six-month outlook projects a modest increase of 3.1 points.

"The unfortunate pattern of the last several years is repeating itself in 2012," said Tim Herbert, vice president, research CompTIA. "Momentum from improving economic fundamentals and positive sentiment fails to sustain itself, stalling at mid-year."

The index is an aggregation of opinions on the U.S. economy, the IT industry and one's company. All three components of the index fell in Q3.

"Any bullishness about the IT industry generally and companies individually was offset by renewed uncertainty about larger economic issues, such as unemployment, stalled earnings at some bellwether companies and softening demand in many overseas markets," Herbert said.

The survey indicates a slight increase in concern among IT industry executives regarding their ability to maintain profit margins. Inevitably, economic malaise leads to greater price sensitivity and decision-making paralysis among many customer segments.

IT firms still expect to increase investments in many areas, though it's likely that in the short-term the rate of growth will slow somewhat. In the Q2 survey, 37 percent of companies indicated they planned to increase expenditures on marketing and advertising. This number fell to 29 percent in Q3. A similar situation exists for spending increases associated with capital investments, new technology purchases, business travel and staffing.

On the hiring front, medium size firms (100 – 499 employees) are most likely to add new staff in the next six months. Overall, 32 percent of firms plan to increase staffing and 54 percent plan to remain at current levels.

The CompTIA IT Industry Business Confidence Index for Q3 is based on a July 2012 online survey of IT industry executives and professionals. A total of 445 IT companies participated.

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