Manufacturers boost IT spending, but not jobs

Manufacturing employment has been a bright spot for the economy, but IT workers aren't benefiting, a new report finds.

Research firm Computer Economics found in its latest study that more than half of all manufacturers are holding IT head count level or cutting staff, even as they increase IT spending.

This is happening even as the White House continues to point to manufacturing as a solid plus for the economy. Alan Krueger, chairman of the president's Council of Economic Advisers, wrote last month that the U.S. has added nearly 500,000 manufacturing jobs since January 2010; he said that was the "strongest growth for any 28-month period since April 1995."

But IT managers may have a different view. From January through April of this year, Computer Economics surveyed more than 200 employers of all sizes in the U.S. and Canada. It found that around 33% of IT shops in manufacturing plan to increase head count, compared with 40% of IT organizations in all sectors.

IT operational spending, meanwhile, is up around 4% in manufacturing companies, compared with 2.2% across all industries.

Frank Scavo, president of Computer Economics, believes the reluctance of manufacturers to add staff results from the increased use of outsourcing and from worries about the economy overall. IT managers are preparing for the possibility that they might have to adjust spending before their budget years end, he said.

This caution might be warranted, he added, based on new data from the Institute for Supply Management. The group, which measures factors including new orders, order backlog and inventory levels, reported that economic activity in the manufacturing sector contracted for the first time since July 2009, though the overall economy grew for the 37th consecutive month.

Other groups that analyze IT employment nationally across all sectors are also seeing some worrisome signs, but overall IT employment continues to increase month to month.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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