Technology Spending Growth to Return in Q4

By Jessica Davis  |  Print this article Print

Forrester Research says that IT spending took a harder hit than expected in the first half of 2009, but IT spending growth will return in Q4 and will continue in 2010. The report aligns with another recent report from Gartner that shows a return of PC sales growth in Q4. Declines are still forecast for the full year of 2009.

Waiting for an end to the recession? Wondering when your customers’ delayed projects will finally get the green light again? Forrester Research now says IT spending growth will return in the fourth quarter of this year and continue in 2010.

That forecast aligns with a recent report from Gartner, which is now forecasting a return to PC sales growth in Q4.

The new forecast from Forrester comes in a report projecting a decline in global purchases of IT goods and services by businesses and governments in 2009 by 10.6 percent in U.S. dollars. That compares to a previous forecast of just 3 percent.

Signs and signals of a potential recovery is nigh?

Forrester says that new data about large declines in business technology investment during Q1 prompted the update to the forecasts.

"While Q1 2009 saw a scary drop in purchases in the U.S. tech market, ironically that is good news for the long run and we expect to see a stronger rebound sooner," says Andrew Bartels, Forrester Research vice president and principal analyst, in a prepared statement.

"The big drops are not precursors to further declines," he says. "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. We also expect that tech markets in Europe and Asia will start to recover in the first half of 2010."

In terms of specific technology categories, Forrester projects 2009 computer equipment purchasing to drop by 13.5 percent, communications equipment purchasing to drop by 12.4 percent, software spending to drop by 8.2 percent, and purchases of IT consulting and outsourcing services to drop by 8.6 percent.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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