CompTIA: IT Executives' Confidence Drop Reflects 'Q3 Curse'

IT executives’ confidence in the U.S. economy, the IT industry and their own companies fell for the second consecutive quarter, reflecting customer buying patterns.

That’s according to CompTIA’s IT Industry Confidence Index for the third quarter. The Index declined 1.4 points, to 61.7, on a 100-point scale. The self-assessment experienced a slightly higher rate of decline (-2.1 percent) than of the U.S. economy and IT industry.

The second-quarter index fell by 0.9 points.

A total of 257 U.S. technology companies participated in the survey, conducted in early July.

“Despite the positive momentum in metrics such as IT sector hiring and revenue growth in many categories, a rebound in business confidence failed to materialize,” said Tim Herbert, CompTIA’s senior vice president of research and market intelligence. “The data indicates the smallest of IT firms, those with fewer than 10 employees, continue to exhibit higher levels of sensitivity to volatility or market disruptions.”

The Index has recorded a negative reading in the third quarter of every year since its debut in 2009, declining on average by 1.5 points — giving CompTIA reason to dub it the “Q3 curse.” By comparison, the fourth-quarter Index has averaged gains of 2.3 points.{ad}

Tech company executives surveyed for the Q3 report said: Forty-nine percent of their customers are increasingly shifting to new models, such as cloud computing and open source; 30 percent of customers are increasingly opting for less expensive or smaller purchases; and 24 percent of customers are increasingly postponing purchases or taking a wait-and-see approach.

Some 71 percent of companies said they are on target or ahead of their revenue goals for 2016, down slightly from 75 percent in the second quarter.

“Among smaller solution providers, a summertime slowdown is a common because many smaller business clients take their foot off the gas in the summer,” said Amy Kardel, chairwoman of CompTIA’s board of directors and co-founder of IT service provider Clever Ducks. “Knowing this trend, solution providers can plan ahead to avoid a revenue dip by looking to schedule projects during the quieter months and thus even out revenue. One peer I know books a lot of work for the school district during the summer because they can only work on their systems while classes are not in session.”