A year after its inaugural quarterly CIO Confidence Poll, Forrester Research, Inc. (Nasdaq: FORR) finds that the outlook for future industry health continues to be strong among CIOs, despite lagging the levels set during the past two quarters. Forrester’s CIO Confidence Poll surveys approximately 200 CIOs of North American firms each quarter, measuring their confidence in the health of their industries, businesses, and IT spending.

Highlights include:

Views on the current business climate remain positive. Fifty-seven percent of those polled cited a strong or very strong current business climate, compared with 36 percent who responded similarly in Q1 of last year. As in Q4 2004, CIOs at companies with at least 5,000 employees feel most positive about today’s business climate.

The future outlook has dimmed slightly. The CIO community continues to be optimistic about future prospects — only 3 percent expect a more challenging business climate three quarters from now. But the brightness of the future outlook has dimmed slightly. Currently only 14 percent of CIOs expect three quarters from now to be much better than today. This compares with 23 percent in Q4 2004 and 18 percent in Q3 2004.

IT spending continues to show more upside. Almost half of the respondents — 45 percent — expect to spend above their 2005 IT budget or at least find new sources of funding. Smaller enterprises — those with 1,000 to 5,000 employees — are most likely to spend above their planned IT budgets. Forrester has seen this number increase quarter over quarter — at the same time last year, only 25 percent expected to outspend their budgets.

Forrester also asks CIOs a few questions each quarter about new initiatives — this quarter the topic du jour was risk management and compliance. While 29 percent of respondents were unfamiliar with the term or unsure of their company’s efforts, 62 percent cited that a corporate-wide compliance and risk management initiative was underway.

The research mentioned in this release, “CIO Confidence Poll: Q1 2005,” is available to Forrester WholeView 2™ clients and can be found at www.forrester.com.