IDC: IT Spending to Slow in 2009

Worldwide spending on information technology is expected to slow significantly next year because of the financial crisis, according to a report published on Wednesday. Market intelligence firm IDC said worldwide IT spending will grow just 2.6% in 2009 compared with the previous year, down from the IDC's pre-crisis forecast of 5.9% growth. The Framingham, Mass.-based company said IT spending in the United States is expected to grow by just 0.9% in 2009, much lower than the 4.2% growth forecast in August. It said IT spending growth in Japan and Western Europe was also expected to hover around 1% in 2009. "The emerging economies of Central and Eastern Europe, the Middle East and Africa, and Latin America will continue to experience healthy growth, but at levels notably lower than the double-digit gains previously forecast," IDC said. "Although all the economic forecasts went from up slightly to down drastically in a matter of days, the good news is that IT is in a better position than ever to resist the downward pull of a slowing economy," John Gantz, chief research officer at IDC, said in a statement. "Technology is already deeply embedded in many mission-critical operations and remains critical to achieving further efficiency and productivity gains," he said. "As a result, IDC expects worldwide IT spending will continue to grow in 2009, albeit at a slower pace." The IDC said that on a sector basis, computer software and services was expected to enjoy solid growth next year while hardware spending, with the exception of storage, is expected to decline in 2009. The IDC said it expects IT spending to return to growth rates approaching 6% in 2012 but estimates more than $300 billion in industry revenues will have been lost due to slower spending over the next four years. The firm said it had also developed a "downside scenario" in the event the impact of the financial crisis is more pronounced. "In this scenario, IDC lowered the forecast for worldwide GDP growth in 2009 to 0.3%, which is 1.5% lower than the current forecast and worse than any year since World War II," it said. "This produced a forecast of 0.1 percent growth in worldwide IT spending in 2009 with negative growth in the United States, Western Europe, and Japan." Copyright Agence France-Presse, 2008