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CompTIA: IT business confidence up

By Grant Gross
January 20, 2011 04:30 PM ET

IDG News Service - Members of the U.S. IT sector are more confident now in their business prospects than they have been in the past year and a half, according to a new survey released by the Computing Technology Industry Association.

The CompTIA IT Industry Business Confidence Index -- which measures the confidence that IT managers and workers have in their own industry, their own companies and the U.S. economy in general -- stood at 60 in December, the trade group said. The index, based on a survey of more than 1,100 IT workers and managers, asks respondents to rate their confidence in those three areas on a 100-point scale.

CompTIA launched the index in June 2009, and December's confidence numbers in the U.S. were the highest in the history of the index.

Global IT spending should grow by 4% in 2011, CompTIA predicted.

CompTIA collects index data for eight countries. The U.S. index rose seven points from September to December, while the global index rose eight points, to 64. The confidence index was highest in Brazil and India, at 75, while it was lowest in the U.S. and South Africa.

CompTIA predicted that the confidence index will rise again in the next quarter.

"After several quarters of lackluster performance, an improving CompTIA confidence index should be welcome news to companies eager for economic stability," Tim Herbert, vice president of research for CompTIA, said in a statement.

U.S. IT workers and managers -- 41% of the respondents were at the senior to executive management level -- expressed the most confidence in the IT industry and in their own companies. Confidence in the U.S. economy remained below 50 on the 100-point scale.

According to the survey results, 45% of U.S. IT companies are planning to increase spending on new products and business lines over the next six months, and 43% plan technology-related investments, an increase of 10 percentage points from September, CompTIA said. Thirty-two percent of U.S. IT companies said they planned to increase hiring over the next six months, compared to 37% in September, the survey said.

Employment trends are "still cause for concern," Herbert said.

Worldwide, 52% of IT firms plan to increase spending on new product lines, and 51% plan to increase spending on technology. "With renewed market stability and optimism, businesses will likely start spending a bit more freely," CompTIA said.

A number of factors could "potentially derail or minimize growth," the organization noted. The study indicates that IT executives remain concerned about weak consumer spending, government regulation and unexpected economic shocks such as an increase in oil prices.

Pent-up demand for IT products and services, along with strong sales in emerging markets and within sectors such as healthcare, will help the IT industry grow this year, CompTIA predicted. However, consumers could seek low-cost options for their IT products, and that could yield high growth in unit sales but modest revenue growth, according to the trade group.

Gross covers technology and telecom policy in the U.S. government for the IDG News Service. You can follow him on Twitter (@GrantGross). His email address is grant_gross@idg.com.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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