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Analysts forecast heavy showers for the IT industry

IDC is forecasting that, in light of September 11, worldwide IT spending will increase by only 1% this year, compared with 12% growth in 2000.

IDC is forecasting that, in light of September 11, worldwide IT spending will increase by only 1% this year, compared with 12% growth in 2000. Worldwide hardware spending will decline by 9% this year, and a further decline of 1% will follow in 2002, it adds.

"2001 has [seen] an unprecedented decline in IT spending around the world, particularly in the US. Hardware shipments have suffered most dramatically, as is always the case in an economic slowdown. This year, due to other factors, things have been even worse than anyone predicted," says John Gantz, chief research officer, IDC.

The US slowdown has also spread to other regions, most notably Western Europe. Hardware spending in Europe will show a decline of 4% this year and will decline by a further 2% in 2002. In Japan, PC spending is declining by 16% this year.

The only highlight is software and services, which the analyst house predicts will recover, to some extent, in 2002, with an upturn in the second half of the year expected to produce 2002 worldwide growth rates of 11% for software and 9% for services. The driver for this minor recovery is investment in e-business and other leading solution areas, says Gantz.

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