IT spend in US seen dropping 60 per cent in 2009 news
10 December 2008

Technology analyst firm Forrester has reduced IT spending forecast for the US from the earlier 6.1 per cent to 1.6 per cent, a second time since September this year.

It said growth in information technology spending in the US next year is expected to fall over 60 per cent, amidst a substantial drop in computer sales next year.

Forrester released the 6.1 per cent growth rate prior to the steep drop in IT spending at the close of the third quarter. Forrester had earlier forecast IT spending in the US to grow 10 per cent in 2009, which was later revised downwards to 6.1 per cent.

''The 2008 US recession and related slowdown in the US tech market has been delayed, not cancelled. With Q2 2008 data now available for both the US economy and the US tech market, growth in both areas was surprisingly strong,'' it said.

According to Forrester Research, the US economy grew at 3.3 per cent, while business investment in IT equipment and software rose by 11 per cent.

It said ''the conditions were much weaker, with US real domestic purchases barely rising and US revenues of large vendors up by just 4 per cent. The outlook for the second half of 2008 is even gloomier, starting with the Wall Street meltdown. The props under US economic growth in the first half of 2008 will fade in the second. The resulting recession will slow growth in the US market for technology goods and services in the fourth quarter, with continuing weakness in the first half of 2009.''

''Computer equipment will bear the brunt of the slowdown in 2008, but network equipment and software purchases, while still growing, will see slower growth in 2009. And IT services purchases, which so far have defied the gravity of slow growth, will start to see little or no growth,'' it said.

Forrester expects US real GDP in (the third quarter of) 2008 to accelerate in the fourth quarter of 2008 and the first half of 2009, before a weak recovery starts.


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IT spend in US seen dropping 60 per cent in 2009