While the unemployment rate in the Information Technology sector is faring better than in other job categories, it’s still not rosy.  A new survey out yesterday explains why.

Almost half (46%) of all information technology organizations plan to cut headcount this year, according to a survey of 200 IT executives released on Monday by Computer Economics, an Irvine CA-based IT metrics and advisory firm.
Twenty-seven percent of IT executives plan to add staff this year, and another 27% plan to keep their staffing levels the same.

The study also found the use of temporary IT workers remains unchanged from the previous year. The study found that the typical IT organization relies on contract workers for 5% of its full-time equivalent headcount.

The numbers in IT hiring are driven largely by the amount of capital expendure on IT-related projects that take place at large corporations.  Lots of projects means lots of IT staff required.  With capital expenditure on IT down nearly 38% this year, we can all see why staff levels are being cut.  These staffing and cap ex statistics are highly correlated.

When will IT hiring return?  Most of my contacts in the industry are placing their bets on Q2 2010.  Watch the earnings reports of the large national staffing firms like Manpower, Adecco, and Volt, paying keen attention to their top-line numbers.  A drop in revenues at the larget national staffing companies signalled recession in 2008 about 4 months before the other signals started shouting “look out!”  The same will be true on the way back up.