IT budgets to grow six percent in 2004

While caution still reigns, CIOs’ outlook for technology investment in 2004 shows improvement from 12 months ago. According to 185 executives surveyed, IT budgets will grow at 6 percent over existing levels in the coming 12 months, up from the forecast of 4.2 in November. The Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, also bounced back up to 2.1 from 1.7 in November. The survey was conducted by CIO magazine in the US.

Profits continue to stabilize, with only 28 percent of respondents listing weak profits as the number one negative factor influencing IT spending, compared to 35 percent in November.

However, CIOs do not have a green light to spend just yet. Close to one-third (31%) of executives surveyed reported tight financial conditions as the key factor affecting IT spending.

CIOs report that overall IT compensation has increased 3.4 percent in the past 12 months, and that filling open IT positions is getting more difficult than it was six months ago. Only 26 percent of respondents report that the IT labour supply is plentiful, while 69 percent consider IT labour available.