Menu
Forrester slashes IT spending forecast

Forrester slashes IT spending forecast

The economic downturn has led to a sharp reduction in forecasts of IT spending. Forrester Research, after predicting 6.1 percent growth in US purchases of IT goods and services as recently as August, now says that spending growth in 2009 will be just 1.6 percent.

"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 writes in a market outlook report released Tuesday.

IT spending grew 4.1 percent in 2008, but purchases are sharply slowing. U.S. revenues of large IT vendors dropped 2 percent in the third quarter, Bartels states.

"Computer equipment purchases are already in decline," he writes. "Growth is slowing for purchases of network equipment, software purchases, and IT consulting and outsourcing services. Continued declines in purchase are in prospect for computer equipment purchases in Q4 2008 and the first half of 2009, with little or no growth in communications equipment and IT services. Software growth will drop to as little as 2 percent in coming quarters."

Forrester says it remains relatively optimistic, predicting that after periods of slowing growth IT purchases will start to revive in late 2009 and will grow by 8 percent in 2010. Forrester does not expect anything like the 15 percent to 20 percent declines seen after the dot-com bubble burst.

In February, Forrester predicted 2009 spending growth of 10 percent but has revised that prediction downward three times, culminating in the latest forecast of 1.6 percent growth. Forrester's predictions of a recovery in the second half of 2009 are pinned on expectations that a large economic stimulus package will be forthcoming from President-elect Barack Obama's incoming administration and the Democratic-controlled Congress.

"This surge in federal government spending will benefit the construction industry, the healthcare and education industries, and state and local governments," Bartels writes. "The federal government and public services industries of healthcare and education were already going to be among the better buyers of IT goods and services, but this stimulus package will solidify that status. As the program kicks in, state and local governments and the construction industry will step up their IT buying in late 2009."


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.

Tags forresterinternational news

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments