Global IT spending to drop by nearly 11% in '09, Forrester says

The high-tech industry might finally be hitting rock bottom, according to Forrester Research, which Tuesday forecast global IT spending to decline by nearly 11% in 2009 before vendors and end-user organizations begin to see some signs of recovery later this year and early next.

Forrester Research adjusted its global outlook for IT purchasing in 2009 down again from the 3% decrease the firm previously predicted in March. Specifically in the U.S., the drop in tech purchases will be down 5.1%, a further decline from the 3.1% the research group forecast for the country earlier this year. The primary reason for the shrinking U.S. forecast is the “ghastly” first quarter and “likely similarly poor results in Q2”, according to Forrester.

“The biggest factor bringing the tech market down is the breakdown of the financial systems (which both caused the recession and is exacerbating it),” writes Andrew Bartels, Forrester Research vice president and principal analyst, in the report “ U.S. and Global IT Market Outlook: Q2 2009.” “U.S. businesses have been hoarding cash and cutting capital investment, with IT capital investment getting caught in the pullback.”

That pullback is reducing global spend across all categories of IT, Forrester predicts. For example, the research firm expects purchases of computer equipment to be down by 13.5% and a 12.4% decline in communications equipment buying. Software spending is anticipated to drop by 8.2%, and IT consulting and outsourcing services will be about 8.6% lower, Forrester says.