Forrester downgrades US IT spending forecast

Obama's stimulus spending was a big boost to the still-strong growth rates

Forrester Research is now predicting U.S. IT spending to grow 8.1 percent this year, a slight drop from the analyst firm's July prediction of a 9.9 percent uptick, according to a new report released Friday.

The firm lowered its forecast based on weaker-than-expected U.S. economic data in the second quarter and revised figures from the U.S. Department of Commerce, states the report by analysts Andrew Bartels, Christopher Mines and Chétina Muteba.

U.S. computer equipment sales are especially strong this year, with spending set to rise 19 percent. Software sales will jump 9.1 percent, with PC operating systems, application servers and enterprise process applications posting particularly healthy gains of 22.3 percent, 12.6 percent and 10.8 percent, respectively.

Forrester has predicted IT spending would rebound strongly this year and next due to improving macroeconomic conditions and a fresh wave of technology innovation. "The latter remains very much in place, but the former has taken some knocks," the report states.

The revised U.S. figures have brought down Forrester's global estimate of 2010 IT spending to 7 percent from 7.8 percent. Global IT spending will also grow 7 percent in 2011, with U.S. spending jumping 7.4 percent, according to the report.

The report also adds a caveat to the "still-robust" figures, noting that the "much-maligned economic stimulus program of President Obama undoubtedly contributed to these growth rates."

In a May 2009 report, Forrester estimated that stimulus spending would generate some US$27 billion in revenue for vendors during that year and 2010, with two-thirds arriving in 2010.

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Chris Kanaracus

IDG News Service
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