Executive Briefings

IT Companies Remain Optimistic Despite Slight Dip in March

The latest CompTIA IT Industry Business Confidence Index reveals that optimism over future business conditions remains strong and the majority of information technology companies view their prospects favorably.

After a big jump of 6.3 points in December, the overall index experienced a slight dip in March, falling from 56.6 to 54. But even with the dip, an analysis of individual components of the index reveals continued strength in the tech sector relative to the overall U.S. economy.

Over the next six months, 53 percent of IT companies expect to shift more resources to initiatives associated with revenue generation, such as investments in research and development, new product lines or efforts to enter new vertical markets. Investment in new revenue generating initiatives ranks as the number one "increase" area for large and medium-sized IT companies; and as number two for small and micro-sized organizations.

"This leading indicator, which is expected to increase about six points over the next six months, suggests IT companies expect continued sales growth to materialize," says Tim Herbert, vice president, research, CompTIA. Herbert noted that a number of economic indicators continue to point to a fragile recovery. Unemployment remains high, lending is tight and consumers and businesses are still hesitant to spend. "With perceived recovery momentum comes rising expectation that business activity follows soon thereafter," he said. "If it doesn't happen, confidence can weaken."

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The latest CompTIA IT Industry Business Confidence Index reveals that optimism over future business conditions remains strong and the majority of information technology companies view their prospects favorably.

After a big jump of 6.3 points in December, the overall index experienced a slight dip in March, falling from 56.6 to 54. But even with the dip, an analysis of individual components of the index reveals continued strength in the tech sector relative to the overall U.S. economy.

Over the next six months, 53 percent of IT companies expect to shift more resources to initiatives associated with revenue generation, such as investments in research and development, new product lines or efforts to enter new vertical markets. Investment in new revenue generating initiatives ranks as the number one "increase" area for large and medium-sized IT companies; and as number two for small and micro-sized organizations.

"This leading indicator, which is expected to increase about six points over the next six months, suggests IT companies expect continued sales growth to materialize," says Tim Herbert, vice president, research, CompTIA. Herbert noted that a number of economic indicators continue to point to a fragile recovery. Unemployment remains high, lending is tight and consumers and businesses are still hesitant to spend. "With perceived recovery momentum comes rising expectation that business activity follows soon thereafter," he said. "If it doesn't happen, confidence can weaken."

Read Full Article