IT Leaders Express Concern Over Government Shutdown: CompTIA

On the investment front, IT companies expect to boost spending over the next two quarters in staffing and new products or business lines.

Concerns about government gridlock took a sharp upswing in a survey focusing on business confidence among IT industry leaders, according to CompTIA’s IT Industry Business Confidence Index.

During the shutdown, only "essential" federal government activities are permitted–those necessary for the safety of human life, protection of property or otherwise authorized by law, while all other activities must cease. Concern over government action (or inaction) and its impact on the overall economy jumped from 31 percent in Q3 to 42 percent in Q4.

"Up until this point, IT industry executives viewed the economy as progressing steadily towards stability and modest growth," Elizabeth Hyman, vice president of public advocacy for CompTIA, said in a statement. "A portion of the concern can certainly be attributed to the impasse in Washington and the shutdown of the federal government."

Also in the Q4 Index, 16 percent of IT firms report they are tracking ahead of revenue goals for 2013, down slightly from the previous quarter (22 percent in Q3). On par with the previous quarter’s Index, 49 percent of IT industry executives expressed concern over price-sensitive customers reluctant to spend money on technology products and services.

"Realistically, after a prolonged period of economic sluggishness, it will take a period of sustained economic strength for customers to fully regain their confidence in longer-term capital or operational investments," Tim Herbert, vice president, of research and market intelligence at CompTIA, said in a statement.

While the Index came in at 58.1 on a 100-point scale for the fourth quarter, compared to readings of 57.9 in Q3 and 58 in Q2, a more notable change occurred in sentiment about the overall economy, which fell 1.1 percentage points in Q4, the first decrease in over a year.

The smallest firms (those with fewer than 10 employees) voice the most concern about potentially missing their revenue targets: Just under a third (31 percent) placed themselves in the lagging category. On the investment front, IT companies expect to boost spending over the next two quarters in staffing and new products or business lines—two key areas for growth, the report noted.

"These often go hand-in-hand," Herbert said. "Expanding into a new product category, such as cloud or big data, typically requires an investment in human capital as well. This may occur through new hires or training for existing staff."

Data for the Q4 Index, which is comprised of three metrics: opinions of the U.S. economy, the IT industry and one’s company, was collected through an online survey of executives at 334 IT companies conducted during early October.