Not surprisingly, the U.S. federal shutdown is having a negative impact on the IT industry, with a growing number of IT executives concerned about the economy, according to CompTIA’s latest survey on IT business confidence.
The Q4 IT Industry Business Confidence Index shows more IT executives worried about the state of the economy—that number dropped 1.1 percent in Q4 (for the first time in a year)—and concern over the federal government’s impasse over the budget—that number jumped to 42 percent from 31 percent in Q3.
“One in four IT companies does regular business with some branch of government,” said Elizabeth Hyman, vice president, public advocacy, CompTIA, in a prepared statement. “The federal government alone purchases more than $80 billion in technology each year, so the effect of a shutdown directly impacts the bottom line of these companies.”
That means, of course, that a lot of IT projects are on hold, a lot of IT workers are idle and a lot less money is flowing through solution providers’ business.
“There’s also the potential for a longer-term impact if federal departments and agencies are unable to plan for and allocate current and future IT resources,” Hyman said. “The technology companies and workers they’re doing business with will be in limbo, too. There will be hesitancy to hire people.”
What’s more, funding from the Small Business Administration that many small IT service providers count on is being delayed, thanks to the government shutdown. For some, the delay could shut their doors for good.
The index also shows a decrease in the number of companies tracking ahead of their revenue goals for 2013—16 percent in Q4 vs. 22 percent in Q3. However, more companies are meeting their goals, with only 24 percent report lagging behind compared with 32 percent in the last quarter.
Although the government shutdown is only in its second week, CompTIA’s latest survey shows what the rest of the country already knew: the current situation isn’t good for anyone. No matter what side of the political fence you occupy, there are no winners in a stalemate. The ramifications of the government impasse will be felt far and wide for months to come, even after a budget finally passes. It’s my belief that we are only beginning to feel the effects of the shutdown.