Global IT spending forecast to fall

Global IT spending is expected to drop three per cent this year

Global IT spending in 2009 is expected to fall for the first time since 2002, according to a new report from Forrester Research.

The analyst firm's Global IT Market Outlook: 2009 forecasts that global IT spending will drop by around three per cent this year to $1.66tn (£1.14tn), and may fall even further.

IT spending rose eight per cent in 2008, largely due to fluctuations in the value of the dollar, and is expected to rise again in 2010.

"For IT vendor market strategists, the global IT market outlook is gloomy for 2009, with prospects of improvement in 2010. Unlike in past years, there are no significant growth markets to offset the weak ones," wrote Forrester research vice president Andrew Bartels.

"Indeed, the best market for vendors in 2009 and 2010, especially those selling next-generation technology like server virtualisation, service-oriented architecture software and unified communications, may well be the US market."

All sectors are going to find money hard to come by, and the services and outsourcing markets will also be affected, according to the report.

Demand is weakest in Europe and Latin America, but even the Pacific Rim and China will have a tough 2009. US spending will be the least hard hit, but the fluctuating value of the dollar could have a major effect on growth rates.

"Our forecasts for US and global IT purchases and spending in 2009 rest on two assumptions. First, that economic recession in the US and several other major economies will start to recover in the second half of 2009; and second, that the dollar will pull back from its late 2008 strengths but not return to its early 2008 levels," said Bartels.

"If the recession lasts into 2010 and becomes markedly deeper than present forecasts, the weaker than expected economic growth will cause tech purchases in local currencies to drop by three per cent or more."