While IDC’s outlook for IT spending over the next 12 months has not changed from the revised forecasts published in November, the research firm suggests IT buyers are now waiting to see whether the bailout measures take hold and the global economy regains its footing.
In November, IDC reported worldwide spending on IT would in 2009 as a direct result of the global financial crisis that began in September 2008. IT said worldwide IT spending will grow 2.6 percent year over year in 2009, down from its pre-crisis forecast of 5.9 percent growth. In the United States, IT spending growth is expected to be 0.9 percent in 2009, lower than the 4.2 percent growth forecast in August.
Looking beyond 2009, IDC expects IT spending to make a full recovery by the end of the forecast period with growth rates approaching 6.0% in 2012. Despite these gains, IDC estimates that more than $300 billion in industry revenues will have been lost due to slower spending over the next four years.
“The good news in this month’s results is that things didn’t get any worse,” said John Gantz, IDC’s Chief Research Officer. “Although FutureScan is at the lowest point in its five-year history, IDC remains optimistic that IT spending will recover more quickly than it did following the 2002 downturn, when we were dealing with both the dot.com and Y2K IT purchasing bubbles. That IT spending downturn took all the slack out of the market.”
The Buyer Intent metric for December was 942, which was up slightly from 936 in November. Buyer Intent reflects market demand for IT products and services over the next 12 months. The Market Indicators number, which combines input from economic and IT industry revenue forecasts, was 941, down somewhat from the previous month’s 978.
The FutureScan indicators this month point to a potential decline of more than 5 percent in U.S. IT spending growth over the next 12 months. However, IDC forecasts that U.S. IT spending growth in 2009 will remain positive at 0.9 percent.
“There is a possibility that IT spending will be more deeply affected by the financial crisis than our current forecast indicates,” noted Gantz. “For that to happen, economic growth will have to fall further than predicted by the IMF, UN, or Consensus Economics. Even in our downside scenario, where we had GDP growth dropping to its lowest point since 1946, U.S. IT spending growth would not go as negative as it did in 2002.”
FutureScan is a set of market metrics that measure supply and demand in the IT industry based on leading indicators and customer surveys. Values reflect expectations of future growth, with an index value of 1000 indicating zero growth and each additional 10 points representing roughly 1 percent of expected growth or contraction.