Economic recovery drives IT market

The global IT market has hit rock bottom and is poised for recovery in 2002, according to IDC. The rebound is attributed to strengthening economic conditions in the US.

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By  Matthew Southwell Published  May 7, 2002

The global IT market has hit rock bottom and is poised for recovery in 2002, according to IDC. The rebound is attributed to strengthening economic conditions in the US.

However, the analyst house warns that IT spending growth will remain muted by historical standards before staging a full recovery in 2003. Worldwide IT spending growth, which was flat in 2001, is projected to rise to 4.7% in 2002 and to 9.6% in 2003.

“The ingredients for a technology rebound are falling into place,” says Kevin White, research manager of IDC’s Global IT Economic Outlook program. “Recent data releases point to a faster-than-expected recovery in the United States economy. As business conditions firm we expect to see companies re-launch IT projects that were deferred in 2001.”

IDC predicts a significant improvement in the United States IT market over the next two years. IT spending in the US is forecast to rise by 3.7% in 2002, reversing the 3.5% contraction witnessed in 2001. Outside of the US, Western European and Asia/Pacific markets are also predicted to grow during 2002. The former will see a 6.2% rise in IT spending and the latter 4.7%.

“Businesses recognise the potential for IT to reduce costs, expand revenue, and improve the bottom-line. But in the short-term, making these investments require funds that are often in short supply during a downturn. As the economy gathers steam and corporate profits improve, businesses will have the resources to invest in IT,” explains White.

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