Is the Trump bump over for government contractors?

The bump in optimism that we saw following the election of President Donald Trump has all but disappeared in our latest Washington Technology Contractor Confidence Index.

The Index has fallen more than 10 points since January. It now stands at 102.2 for the third quarter, compared to the 112.9 we saw at the end of the second quarter.

This drop puts the Confidence Index near the same range it was during the Obama administration, where we saw it at 100 and just below that mark.

Our quarterly Contractor Confidence Index is based on a survey measuring the sentiment of the market. Each quarter we ask the same set of questions around expectations such as hiring, growth and job satisfaction. The results are used to create an index number that lets us track the ups and downs in the market.

Fewer people believe the market is headed in a positive direction as only 34.5 percent gave that answer in our third quarter survey versus 47 percent for the second quarter. Also, 28.7 percent saw the market heading in a negative direction for our third quarter survey versus 24.8 percent in the second quarter.

Feelings about growth also fell slightly as 55 percent predicted their companies would grow compared to 55.9 percent last quarter. Those expecting shrinkage grew to 11 percent from 10.2 percent.

Also significant is the number of respondents who are sure what direction growth is headed more than doubled. That reading went from 5.6 percent in the second quarter to 13.2 percent in the third quarter.

Another negative showed up in the question about investments in infrastructure. Those who said they expected an increase fell from 39 percent to 30.8 percent. Those expecting a decrease increased to 18.7 percent in the third quarter compared to 8.5 percent in the second quarter.

Hiring expectations stayed steady as did expectations around layoffs and other cost cutting moves.

Job satisfaction remained high though it dipped slightly from 67 percent to 62.2 percent. The number of respondents who said they were looking for a job also increased from 19.5 percent in the second quarter to 26.7 percent in the third.

The comments we received centered mostly on uncertainty in the market place and the Trump administration’s missteps and management mistakes.

“The uncertain legislative agenda, dynamic regulatory environment, and budget constraints are making it challenging to figure out where the opportunities will be and where to invest,” one commenter wrote.

“The federal agencies that we deal with are so short staffed that they can hardly approve our invoices much less work on new RFPs,” another wrote.

There also were complaints about a lack of stability. “Very few decisions are being made,” one wrote. “The direction as many agencies is not clear.”

Interestingly, the question we asked about the Trump administration creating a more pro-business environment was evenly split: 31 percent said the administration had fallen short, while another 31 percent said the administration had fallen short. The rest – 38 percent – said that the administration had met expectations.

Do you feel the market is headed in a positive or negative direction?

Do you expect your company's revenue to grow, shrink or stay the same over the next six months?

Do you expect your company's infrastructure investments to increase, decrease or stay the same?