Industry business confidence index holds steady in third quarter of 2013

The CompTIA IT Industry Business Confidence Index held steady in Q3, coming in at 57.9 on a 100-point scale compared to a 58.0 reading in Q2.

The Index is a measurement of technology business sentiment produced for the past five years by CompTIA, a non-profit association for the information technology (IT) industry.

The forward-looking component of the Index projects a gain of 2.7 percentage points over the next two quarters.

Of the Index’s three components, 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, CompTIA.

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

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

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 per cent) 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.

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.

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