• E-mail this page
• |  Print this page
• | 
• | 
• | 

Economic Perceptions

Forty percent of the economists the association surveyed cited terrorism as the top impediment to short-term economic growth. That's up from 19% in March, and the highest level since the beginning of the Iraqi war. “Terrorism produces the greatest short-term risk to the economy, and that's where NABE's members believe the next president should spend the most of his effort," association president Duncan Meldrum, chief economist at Air Products and Chemicals Inc., said in a statement announcing the survey.

Businesses just don't feel comfortable making big investments these days, either in equipment or workers, despite what government statisticians say. In the Labor Department's employment report issued earlier this month--the one that got all the press because the employers increased payrolls by a mere 32,000 workers in July--the IT services sector saw a 4,200 gain in employment. Looking at it one way, more than one in 10 of new jobs created last month came within the IT services sector. Viewing it another way: that figure represents a minute 0.35% uptick, virtually no gain at all. Still, it's better than the overall workplace economy, but nothing to be thrilled about. IT services firms experienced the minuscule rise in employment, in part, because employers feel jittery about committing themselves to full-time, permanent workers. There I go again, being pessimistic.

As an antidote to my gloomy economic assessment, I spoke with Bill Zadrozny, president of Siemens Financial Services, which leases and finances IT equipment. Zadrozny understands my misgiving. "What we're hearing is that there's some hesitation in the CEO office, mostly because of terrorism," Zadrozny says. But, he contends those concerns will disappear within months, and companies will invest in IT. Any perceived lull, he says, is just typical summertime pause. "It's not much different than other Julys into Augusts. We anticipate a good pickup in spending in September."

Indeed, he says new business generation for equipment loans and leases is up 11% this year. Rising interest rates--which could spur some companies to borrow now rather than wait for rates to get higher--will have little to do with increased IT spending, he says. Many companies have the cash to make necessary IT investments.

Many companies now are opting to lease, rather than buy, which Zadrozny suggests means the economy will improve in the near future. His reasoning: Companies lease when they expect the tide to turn, and don't want to commit for the long term. In two or three years, when the economy is booming again, they'll buy. Sounds a lot like how companies approach employment; they'll lease workers from IT services firms for the time being, and when the economy strengthens, they'll buy as they add full-time IT pros to their staffs.

Maybe then I'll see, not a half-full glass, but one that's overflowing. Let's drink to that.

« Works In Progress | Main | Frustrated IT Pros »