IT Hiring, Budget Increase Prospects Slide: CDW Report
The latest CDW IT Monitor revealed lower expectations for budget increases and hiring, along with a drop in overall hardware spending. However, increases in software spending and a more optimistic outlook in key sectors, including small business and health care IT, brought balance to the broader IT sentiment, according to the report.
While the CDW IT Monitor noted numerous fluctuations among sectors and industries surveyed, the comprehensive figures indicate that, on the whole, IT sentiment is holding steady. The Six-Month Growth Outlook, which measures long-term anticipated investment, decreased 1 point from June to 67 and was unchanged from a year ago.
"Despite ongoing economic uncertainties, the overall outlook remains relatively stable," said Neal Campbell, senior vice president and chief marketing officer at CDW. "This shows that while IT decision makers are evaluating and scrutinizing their investments, they are still spending, especially in areas such as software and security."
Investments in IT solutions remain a priority in both the corporate and government sectors, according to the report, but the weak budget outlook did impact spending potential in the next six months. In the IT solutions category, security now tops the list of IT decision makers' priorities. Fifty-nine percent of those IT decision makers who are spending more on solutions this month will spend on security.
Hardware and software investments over the next six months are expected to increase for the state and federal governments. According to the latest CDW IT Monitor, hardware investments at the state level will increase 1 percentage point to 84 percent and 5 percentage points at the federal level to 90 percent. The six-month outlook for software climbed 5 percentage points for government organizations at the state and federal levels, reaching 82 percent and 91 percent, respectively.
While six-month anticipated hardware spending dropped among midsize and large businesses, 87 percent of midsize and 90 percent of large businesses are still committed to hardware investments. On the software front, demand over the next six months slipped 4 percentage points for midsize businesses to 84 percent, while investments at large businesses held steady at 91 percent.
In the corporate sector, 22 percent of small business IT decision makers predict budget increases in the next six months, gaining 3 percentage points from June. Additionally, small businesses anticipate more near-term spending and are expecting to increase software investments by 6 percentage points and solutions investments by 5 percentage points over the next six months.
Despite 8 and 10 percentage point budget declines at the state and federal levels of government, respectively, 29 percent of local government IT decision makers foresee budget increases in the next six months, up 7 percentage points from June. Local government is less bullish on long-term hardware and software spending, but expects to increase both one-month and six-month spending in IT solutions by 4 percentage points over June levels.