Forrester outlook highlights tech spending woes

June 30, 2009

Steep declines in business technology investment during the first quarter have prompted Forrester Research to issue a more pessimistic outlook for 2009 IT spending.

The research house now expects a 10.6 percent decline in global tech purchases by businesses and governments (as measured in U.S. dollars), compared with the 3 percent drop it forecast at the beginning of the year. In the U.S., Forrester now expects a 5.1 decline, versus its previous forecast for a 3.1 percent drop.

Forrester analyst Andrew Bartels said in a statement the first quarter saw a “scary” drop in purchases in the U.S. tech sector. However, he noted “the big drops are not precursors to further declines; rather, we think they are evidence of a temporary pause in U.S. tech purchases, which we expect to start recovering in Q4 as businesses realize that they overreacted in the first quarter.”

Forrester still expects growth in U.S. IT investment to return in the fourth quarter, and predicts tech markets in Europe and Asia will start to recover in the first half of 2010.

On a global basis, the group foreacast computer equipment purchases to fall 13.5 percent in 2009, communications equipment to drop by 12.4 percent, software to sink 8.2 percent, and IT consulting and outsourcing services to fall 8.6 percent.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/