Menu
Forrester slashes global IT outlook

Forrester slashes global IT outlook

Citing a possible mild US recession, Forrester Research has downgraded its IT spending outlook.

Forrester Research said Monday that it is downgrading its 2008 forecast for IT purchasing in both the U.S. and around the world.

The firm is still predicting increased IT spending, but has dropped its U.S. growth projection to 2.8 percent from 4.6 percent, and its global forecast to 6 percent from 9 percent.

Andrew Bartels, vice president at Forrester, said in a statement that the forecast is based on the assumption a mild recession will hit the U.S. economy in the second or third quarter.

"While it is by no means certain that the U.S. economy will in fact experience a recession, the risks of one are high enough to justify a more conservative outlook for the IT market." The sheer size of the U.S. market is enough to affect spending globally, he added.

Forrester is pegging the global market for IT spending in 2008 at $1.7 trillion, and said IT purchasing grew at 12 percent globally worldwide and 6.2 percent in the U.S. during 2007.

Region to region, the 2008 outlook varies, according to Forrester.

Growth in central and western Europe will stand at 5 percent this year, the company said. That is a substantial drop from 2007's 15 percent growth rate, but Forrester noted that the dollar's weakness against the euro helped drive that performance.

Meanwhile, Eastern Europe, the Middle East and Africa are set for a strong year, according to Forrester. Oil-producing nations like Russia and Saudi Arabia will see 12 percent growth in 2008, just a slight drop from last year.

The Asia-Pacific region will also see strong growth at nine percent, but that figure represents a drop from the 15 percent rate posted in 2007, Forrester said.

Meanwhile, the U.S.'s overall share of global IT spending is still falling, dropping this year to 33 percent, Forrester said. That percentage stood at 40 percent in 2003, according to Forrester. The U.S. still has a healthy stake in software purchasing, however, with a 44 percent share of the worldwide market, the analyst firm said.

The picture is also mixed within various sectors, according to Forrester.

Software buying will grow 8 percent globally, down from 11 percent in 2007.

In contrast, hardware will be especially stunted. The firm predicts investment growth in communications equipment will fall to 3 percent from last year's 12 percent tally; and growth in IT spending on personal computers, servers, storage devices and peripheral markets will drop to 4 percent from 12 percent last year.

IT outsourcing will grow by 9 percent while consulting and integration services will see a slowdown, the firm predicted.

Forrester analyzed financial reports from 46 large IT vendors, as well as data from the Organisation for Economic Co-operation and Development, in preparing the forecasts.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News honoured the industry’s finest on a standout evening for the New Zealand channel, recognising the achievements of established partners, emerging players and innovative start-ups, in front of over 460 technology leaders in Auckland.

Reseller News Innovation Awards 2018: meet the top performing partners
Champagne Reception kicks off Reseller News Innovation Awards 2018

Champagne Reception kicks off Reseller News Innovation Awards 2018

More than 460 channel leaders came together to toast the top performers of the New Zealand industry, during the opening Champagne Reception at the Reseller News Innovation Awards 2018 - in association with Techbuyer.

Champagne Reception kicks off Reseller News Innovation Awards 2018
Chasing innovation: how Kiwi partners can create a new customer agenda

Chasing innovation: how Kiwi partners can create a new customer agenda

This exclusive Reseller News Roundtable - in association with Rhipe and Microsoft - detailed a blueprint for customer success, outlining the new role of the modern-day partner and wider network in New Zealand.

Chasing innovation: how Kiwi partners can create a new customer agenda
Show Comments