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Research firm Forrester slashes US IT spending forecasts in 2009
10/12/2008 10:11

The growth of US information technology spending in 2009 is expected to be just 1.6 percent, a sharp drop from pervious forecasts, research firm Forrester said yesterday, citing economic downturn.

In September, Forrester already lowered the forecasts of US IT spending growth next year from 10 percent to 6.1 percent.

Releasing its latest US IT market outlook report yesterday, the firm said it assumed the decline in US real GDP will accelerate in the fourth quarter of 2008 and the first half of 2009, which made it to further cut IT spending forecast.

"The question for the US tech market is no longer whether the US economy is in recession -- instead, it is how long and deep the recession will be and how much damage will it do to the tech sector," Forrester analyst Andrew Bartels wrote in the report.

"This kind of decline in the economy will pull growth in US business and government purchases of IT goods and services down to1.6 percent in 2009, from 4.1 percent growth in 2008," the report said.

The weakening of the US tech market was already evident in the third quarter of 2008. Data released by the report showed that US revenues of large vendors dropped 2 percent.

"Computer equipment purchases are already in decline. Growth is slowing for purchases of network equipment, software purchases, and IT consulting and outsourcing services," the report noted.

It predicted continued declines for computer equipment purchases in the fourth quarter of 2008 and the first half of 2009,with little or no growth in communications equipment and IT services.

However, Forrester said it remains relatively optimistic, believing the recession will last into mid-2009 and after periods of slowing growth, IT purchases will start to rebound in late 2009.

"Still, we do not expect to see the 15 percent to 20 percent declines in tech purchases that happened in the 2001 to 2002 tech downturn," Bartels stated in the report.



Xinhua