Global IT Spending To Drop 10.6%: Forrester

Businesses and governments worldwide will spend 10.6% less this year on information technology than in 2008, a market research firm said, dramatically lowering its 2009 forecast.

Forrester Research also lowered its projection for IT spending in the United States, saying it would fall by 5.1% this year. Forrester in January had projected a 3% drop in global IT spending and a 3.1% decrease in the U.S.

Forrester revised its forecast based on new data pointing to large declines in spending on business technology during the first quarter.

On a positive note, Forrester said it still expected IT spending growth to resume in the U.S. in the fourth quarter and in the first half of 2010 in other markets.

"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," Forrester analyst Andrew Bartels said in a statement released Tuesday.

Forrester expects spending in all IT categories to fall. Purchases of computer equipment is expected to fall 13.5%, communications equipment, 12.4%; software, 8.2%; and consulting and outsourcing services, 8.6%.

Forrester is not the only analyst firm to revise its projections. Gartner in March lowered its 2009 forecast for global IT spending to 3.8% less than last year, which the researcher said was much worse than what was seen following the dot-com bust in 2001. At that time, spending fell by 2.1%.

A major contributor to the spending drop is the the decrease in the global gross domestic product, or GDP, which is expected to fall by 1.2% this year after expanding by 2.3% last year, Gartner said.

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