Technology purchasing upturn forecast for Q4

3 Jul 2009

Forrester Research is predicting a revival of IT purchasing in the US in the fourth quarter of 2009 and across other global markets by early 2010.

But in the immediate term it is still a tough market, and global purchasing of IT goods and services by businesses and governments is projected to decline by 10.6pc, compared with a 3pc decrease originally projected at the start of the year.

The latest quarterly update of Forrester’s IT spending outlook also projects a 5.1pc decline in the US annual IT market, compared with the 3.1pc decrease previously forecast.

New data about large declines in business technology investment during the first quarter prompted Forrester to update its forecasts for technology spending. On a positive note, Forrester still expects growth in US IT investment to resume in Q4 2009, and 2010 is expected to bring a revival of IT buying in other markets as well.

“While Q1 2009 saw a scary drop in purchases in the US tech market, ironically that is good news for the long run and we expect to see a stronger rebound sooner,” said Andrew Bartels, Forrester Research vice-president and principal analyst.

“The big drops are not precursors to further declines; rather, we think they are evidence of a temporary pause in US tech purchases, which we expect to start recovering in Q4 as businesses realise they overreacted in the first quarter.

“We also expect that tech markets in Europe and Asia will start to recover in the first half of 2010,” he added.

Forrester uses several metrics to determine the health and size of the US IT market quarterly and of the global IT market on an annual or as-needed basis.

The data in the new Forrester forecast report focuses on IT purchasing – how much computer and communications equipment, software, IT consulting and integration services, and IT outsourcing that businesses and governments buy from technology vendors.

Looking at the 2009 global IT spending outlook by sector, Forrester anticipates lower investment than previously expected across all categories.

Forrester projects purchases of computer equipment to be down by 13.5pc, communications equipment buying to drop by 12.4pc, software spending to decline by 8.2pc, and purchases of IT consulting and outsourcing services to be 8.6pc lower.

By John Kennedy