Forrester Sees Big Slowdown In U.S. IT Spending - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Government // Enterprise Architecture

Forrester Sees Big Slowdown In U.S. IT Spending

While the numbers are bleak, analysts don't expect to see the 15% and 20% declines in tech purchases that occurred in 2001 and 2002.

Forrester Research on Tuesday said IT spending growth in the United States would fall by more than 60% next year, as the nation's recession takes its toll on businesses.

The market researcher said spending would grow by only 1.6% in 2009, down from 4.1% growth this year. Forrester blamed the economic recession, saying there's no question the U.S. gross domestic product is falling.

"The question for the U.S. tech market is no longer whether the U.S. economy is in recession," the report said. "Instead, it is how long and deep the recession will be and how much damage will it do to the tech sector."

While the numbers are bleak, Forrester, which described itself as a "relative optimist," said it did not expect to see the 15% and 20% declines in tech purchases that occurred in the 2001 and 2002 tech downturn following the dot-com bust.

Nevertheless, computer equipment purchases are already in decline, and growth is slowing for spending on network equipment, software purchases, and IT consulting and outsourcing services. Computer equipment purchases are expected to continue dropping in the fourth quarter of this year and the first half of next year. Software growth is expected to slow to as little as 2% in coming quarters.

Forrester expected the recession to last only until mid-2009, with declines in real GDP of as much as 3.6% on a quarterly basis.

Forrester's projections followed by a couple of months a dismal forecast by Gartner. The analyst firm said the global economic downturn could cause worldwide growth in IT spending to drop to 2.3% in 2009. Gartner had projected a 5.8% increase.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 Outlook: Tackling Cloud Transformation Choices
Joao-Pierre S. Ruth, Senior Writer,  1/4/2021
Enterprise IT Leaders Face Two Paths to AI
Jessica Davis, Senior Editor, Enterprise Apps,  12/23/2020
10 IT Trends to Watch for in 2021
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/22/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Flash Poll