IDC revises IT spending forecast

Persistent economic and political uncertainty continues to affect worldwide IT spending. As such, IDC has revised its forecasts for 2003 and is now predicting that total worldwide IT spending will be $852 billion.

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By  Matthew Southwell Published  April 3, 2003

Persistent economic and political uncertainty continues to affect worldwide IT spending. As such, IDC has revised its forecasts for 2003 and is now predicting that total worldwide IT spending will be $852 billion — a 2.3% growth compared to last year — rather than the 3.7% growth it had initially predicted.

According to the analyst house, worldwide spending on hardware will see a 0.5% decline in 2003, but software and services will witness positive growth returns of 4.5% and 3.7% respectively.

"The outlook for the next six months continues to be extremely volatile and a double-dip IT recession can’t be ruled out in a worst-case scenario. But the fundamental drivers remain solid," says Stephen Minton, director of IDC’s worldwide IT markets group.

"Once the fog of war has cleared, there will be a gradual recovery in corporate profits and business confidence, and this will translate into increased IT spending. We expect to see improved market conditions in every region in 2004,” he adds.

The long term outlook is more positive as IDC predicts that growth rates of between 6-7% will ensure that the global IT market generates US$1 trillion in revenues by 2006.

"We will not return to the double-digit growth rates which preceded the downturn. Those days have gone, at least until the next paradigm shift or speculative bubble. But we will recover to an industry which modestly outpaces growth in the rest of the economy," says Minton.

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