IT Spending to Decline by 10.6%: Forrester

by CXOtoday Staff    Jul 06, 2009

Forrester prompts further pessimistic outlook on 2009 IT spending; accounts first quarter s steep decline of business technology investment as its cause

Forrester, a technology and market research house, now expects a 10.6 % decline in the global tech purchases by businesses and governments comparing to an earlier 3 % drop it had predicted at the beginning of the year.

There is a scary drop in purchases in the US tech sector. However, the big drops are not precursors to further declines; as we think they are evidence of a temporary pause in US tech purchases, said Forrester analyst Andrew Bartels,

We expect to start recovering in Q4 as businesses realize that they overreacted in the first quarter, added Bartels.

On a global basis, the revised spending forecasts in 2009 are

    * computer equipment purchases to fall 13.5 %

   *  communications equipment to drop by 12.4%

   *  software to sink 8.2%, and

   *  IT consulting and outsourcing services to fall 8.6 %.

While Forrester expects growth in US IT investment to return in the fourth quarter, it predicts tech markets in Europe and Asia will start to recover only in the first half of 2010.

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