IT Buyer Expectations Leveling Off

Following a sharp drop last month, IT buyer expectations for December are leveling off, an indication that they are waiting to see if bailout measures put in place by the U.S. and other governments boost the global economy, a market research firm said Thursday.

IDC's Buyer Intent metric for December was 942, which was up slightly from 936 in November. The metric reflects market demand for IT products and services over the next 12 months. However, IDC's Market Indicators number, which combines input from economic and IT industry revenue forecasts, was 941, down from November's 978.

"The good news in this month's results is that things didn't get any worse," IDC analyst John Gantz said of the Buyer Intent figure.

IDC remained "optimistic" that IT spending would recover more quickly that it did following the 2002 downturn, which was sparked by the collapse of the dot-com and Y2K IT purchasing bubbles, Gantz said in a statement. "That IT spending downturn took all the slack out of the market."

Indicators this month point to a potential decline of more than 5% in U.S. IT spending growth over the next 12 months, IDC said. Nevertheless, the analyst firm has not revised its November forecast of 0.9% growth in 2009. Worldwide, IDC expects IT spending to increase by 2.6% next year.

"There is a possibility that IT spending will be more deeply affected by the financial crisis than our current forecast indicates," Gantz said. For that to happen, however, economic growth would have to fall further than predicted by the International Monetary Fund, the United Nations and Consensus Economics.

"Even in our downside scenario, where we had GDP (gross domestic product) growth dropping to its lowest point since 1946, U.S. IT spending growth would not go as negative as it did in 2002," Gantz said.