Forrester lowers US IT spending forecast

Forrester Research, an independent research firm, has revised its 2009 US IT spending forecast and is now projecting 1.6 per cent annual growth in US IT spending for next year as against the earlier projection of 6.1 per cent.

However, the analyst firm has stated that the US IT market outlook is down but not as bad as the 2001-02 tech depression. The latest Forrester report data highlights that the IT consulting and systems integration services will hit the wall in 2009 and that IT outsourcing growth will remain moderate in 2009 and 2010.

This US tech market forecast now assumes that the decline in the US real GDP in Q3 2008 will accelerate in Q4 2008 and the first half of 2009 before a weak recovery starts in the second half.
 
The Forrester report – “US IT Market Outlook: Q4 2008” is based on analysis of US Department of Commerce data and the financial reports of 49 IT vendors, and it details the current IT spending across computer hardware, software, communications equipment, and services.

According to the author of the report, Andrew Bartels (VP, Forrester Research), “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 is still a relative optimist, believing that the recession will last into mid-2009, with declines in real GDP of as much as 3.6 per cent on a quarterly basis. This kind of decline in the economy will pull growth in the US business and government purchases of IT goods and services down to 1.6 per cent in 2009, from 4.1 per cent growth in 2008. The weakening of the US tech market was already evident in the Q3 2008 data, which showed the US revenues of large vendors down by 2 per cent.”