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Sep 14, 2010

Despite Sluggish Economy, Small Business Sector Shows Increased IT Budgets and Spending

Despite Sluggish Economy, Small Business Sector Shows Increased IT Budgets and Spending
  • More than one fourth (27 percent) of IT decision makers at small companies expect increased IT budgets in the next six months, up three percentage points since the June CDW IT Monitor and eight percentage points from this time last year.
  • Seventeen percent of IT decision makers at small businesses are more likely to implement discretionary IT projects, up four percentage points since June 2010.
  • Seven percent of IT decision makers in the small business sector anticipate hiring additional IT staff in the next six months, up five percentage points since the June CDW IT Monitor.
  • VERNON HILLS, Ill. – September 14, 2010 – While national indicators suggest a sluggish economic recovery, small businesses are beginning to show small but important signs of growth in the IT marketplace. The CDW IT Monitor, which has been tracking small business IT sentiment since the beginning of the recession in 2007, reveals IT decision makers at small businesses are gaining confidence and anticipate increased IT investment for the remainder of the year.

    According to the CDW IT Monitor, a bimonthly indicator that tracks the direction and momentum of the U.S. IT marketplace, more than one fourth (27 percent) of IT decision makers at small companies anticipate increased IT budgets in the next six months, up eight percentage points from this time last year. IT decision makers also expect increased budgets for discretionary IT projects over the next six months – 17 percent of IT decision makers at small businesses are more likely to implement discretionary IT projects, up four percentage points since the June CDW IT Monitor. After hitting an all time low in June 2010, seven percent of IT decision makers in the small business sector plan to hire additional IT staff in the next six months, an increased of five percentage points since the June CDW IT Monitor.

    “Despite the struggling economy, it’s reassuring to see signs of hope within the small business sector,” said Thomas E. Richards, president and Chief Operating Officer, CDW. “Although this is just the first step in a long journey toward a recovery, we are encouraged by the increased confidence at the small business level and hope to see an improved IT marketplace emerge in the near future.”

    Although small businesses have gained confidence in the IT marketplace, positive sentiment among IT decision makers at large corporations and federal government organizations has stalled since the June CDW IT Monitor. Sixty-five percent of IT decision makers at large companies anticipate increased IT budgets in the next six months, down two percentage points since June 2010 and the first time sentiment has decreased since October 2009. In addition to declining IT budgets, IT decision makers at large companies also anticipate less IT hiring in the next six months. Thirty-one percent of IT decision makers at large corporations plan to hire additional IT staff, down six percentage points since June 2010. In the government sector, 19 percent of IT decision makers at the federal level anticipate budget cuts, up five percentage points since the last IT Monitor and the most since December 2008.

    “As it becomes clear that the economic recovery is likely to be slow and more prolonged than anticipated, large businesses and government IT decision makers are cautious and are pulling back on IT budgets and hiring initiatives,” added Richards.

    The overall CDW IT Monitor index score held steady at 72 for the fifth consecutive reading as increased positive sentiment in the small business sector balanced out the stalling confidence among IT decision makers at large companies. For more information about the sentiment of IT decision makers, please visit www.cdwitmonitor.com.

    Small Business: CDW IT Monitor Score by Region
    Northeast Midwest South West
    IT Monitor 63 60 64 68

     

    About the CDW IT Monitor
    The CDW IT Monitor was created by CDW and research and analysis is conducted by independent polling firm Richard Day Research of Evanston, Ill. Decision makers are invited from two large national panels of IT decision makers built and maintained by E-Rewards and Survey Sampling International. Data reported in this release are based on a survey of 1,052 IT decision makers conducted between July 26 and August 2, 2010.

    At the center of the CDW IT Monitor is an index number, which registered an initial benchmark reading of 69 in December 2007. Results are calculated on a scale of 0-100, with 100 indicating the highest level of confidence. Future readings of the CDW IT Monitor will continue to yield comparisons to previous scores, allowing for an interpretation of the direction of sentiment in the IT marketplace.

    Data are weighted to ensure that CDW IT Monitor calculations closely represent the overall population of corporate and government employers in terms of size, based on the number of employees. Corporate data are weighted according to U.S. Economic Census data, and government data are weighted according to data from the U.S. Census Bureau’s annual survey of government employment. The margin of sampling error for a survey based on this many interviews is approximately ±4 percentage points for the business sector, and ±6 percentage points for government.

    About CDW
    CDW is a leading provider of technology solutions for business, government, education and healthcare. Ranked No. 41 on Forbes’ list of America’s Largest Private Companies, CDW features dedicated account managers who help customers choose the right technology products and services to meet their needs. The company’s technology specialists offer expertise in designing customized solutions, while its advanced technology engineers can assist customers with the implementation and long-term management of those solutions. Areas of focus include notebooks, desktops, printers, servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions. CDW was founded in 1984 and employs approximately 6,150 coworkers. In the twelve months trailing June 30, 2010, the company generated sales of $8.1 billion. For more information, visit CDW.com.