CIOs surveyed last month expect to boost their IT budgets by 7.1 percent during the next year, according to the latest CIO Magazine Tech Poll released Thursday. That"s a smaller increase than CIOs envisioned in July, but still indicates that IT spending remains strong. CIOs who took part in the poll in July projected that their IT budgets would rise by 10.1 percent during the next 12 months, an all-time high for the poll. By comparison, CIOs thought spending would rise 5.4 percent during the coming year when they were surveyed in January.

"The 7 percent is in the ballpark for what we"ve seen in the last six months," said Gary Beach, group publisher at Framingham, Mass.-based CXO Media Inc. "What will be driving the spending is the application backlog -- 26 percent of the CIOs surveyed said an overwhelming backlog was the biggest hurdle to their effectiveness, while 16 percent said it was an inadequate budget."

When asked about spending in eight specific IT categories, the average number of panelists who plan to boost spending during the next 12 months was 38.6 percent in August, down from the 42.9 percent who said that in July. The percentage of CIOs who plan to decrease spending fell to 12.4 percent in August from 13 percent in July.

Security software remains the strongest sector, with 51.7 percent of poll respondents saying they will increase spending in that area. That figure is down, however, from the 58.3 percent who said that last month.

Storage also remains a strong sector, with 51.2 percent of respondents planning to boost spending in that category, down slightly from 52.5 percent who said that in July; 42.3 percent plan to increase spending on computer hardware, down from the 48.3 percent who said that in July.

"I"m still somewhat concerned with the labor issue," Beach said. "When we talk to CIOs and ask them, "Compared to last year, are you seeing more or less staff turnover?" almost to a person, they say they"re seeing more. In the poll, 17.8 percent say it"s hard to find and keep IT workers -- and those workers are getting 6.4 percent compensation-package increases."

Beach said he"s worried that CIOs won"t have the necessary labor pool to build their custom applications.

"I think over the coming 12 months, there is going to be a mad dash for labor to build the applications that are needed," he said. "The results of our annual Labor Day [hiring] poll we did last week indicate that two-thirds are going to increase hiring over the next 12 months. The question I have is will CIOs be able to find the labor in the talent pool deep enough to address the overwhelming application backlog that companies are claiming is their business obstacle."