IT spending forecasts rebounded in June, following a sharp decline in May, according to the monthly CIO Magazine Tech Poll. CIOs predict IT spending will grow 6 percent during the next 12 months, vs. 4.8 percent in May and 8.2 percent a year ago, according to the survey.
"The spending forecast seems to be stabilizing in the 6 percent range, up a little bit from last month," said Gary Beach, group publisher at CXO Media Inc. "What's interesting is last May we had a forecast of 8.2 percent and now it's 6 percent. That's down almost 25 percent."
Security remains the area where most CIOs (52.5 percent) expect to increase spending over the next 12 months, while 49.5 percent said they plan to increase storage spending.
When asked to compare IT spending now vs. one year ago, 51.1 percent of the CIOs surveyed believe IT spending is stronger in 2005 than it was in 2004, while 20.1 percent of the CIOs view IT spending as weaker than a year ago, and 28.8 percent consider IT spending the same as a year ago.
Beach said he was shocked that CIOs in the financial services sector said they plan to decrease IT spending by 1.2 percent in the next 12 months.
"The lead-dog vertical category has always been financial services," Beach said. "IT people in those categories are early adopters, and they spend lots and lots of money. I was somewhat shocked by the numbers this month. There's something happening in the financial services industry that accounts for why they're cutting back spending in a significant fashion."
This may be the first time that the financial services category has reported negative growth for the coming 12 months, he said.
June results also indicate that 41.8 percent of panelists plan to increase spending on computer hardware, down from 45.1 percent in May, while 24.2 percent intend to decrease spending, compared with 21.4 percent in May.
"Another subline in the report -- and we've been calling this now for a year -- is that the IT labor market, overall, went up to the highest level we've seen since 2001," Beach said, "17.4 percent of CIOs are overall saying IT labor is hard to find and keep. That's up from 14.8 percent last month," Beach said. "And 35 percent of the CIOs at the very large companies are saying IT labor is hard to find and keep."
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