IT spending could help bring the recession to an end, but not in the short term, an analyst has predicted.
Joseph Brusuelas, a director at Moody's Economy.com, told The New York Times that he expected IT spending to be one of the key areas that would grow first as the economy recovers. "We are not going to have a consumer-led recovery," he said.
Investment in IT infrastructure has been hit hard, but as time progresses it will become increasingly vital for businesses to update systems and buy new technologies.
At a time when spending is so low in all areas of investment, IT is expected to be one of the first to recover.
However, the latest US government report into the economy shows that it is too early to expect any improvement in the short term.
The US gross domestic product shrank 6.2 per cent in the last quarter of the year, the fastest decline since 1982. The forecast rate had been for a fall of 3.8 per cent.
The situation was even worse in the IT sector, where investment in hardware and software dropped at an annualised rate of 28.8 per cent, compared to around 23 per cent for overall investment.
The government was not the only one to revise IT spending forecasts. Earlier today analyst firm IDC announced that it was reducing its projection on IT spending from growth of 2.6 per cent to just 0.5 per cent.
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