Forrester Research lowers IT spending predictions

Market research company now warns IT spending growth in the U.S. could come in at 2 to 3 percent growth for 2009--and may even decline.

Forrester Research on Wednesday . Rather than possibly posting an upside above the base, Forrester is warning, at the extreme, the situation could get worse than its September base projections.

Back in September, Forrester made a base prediction that IT spending would grow 6.1 percent in the U.S. and between 7 to 8 percent overseas. Forrester, at the time, also noted a potential existed that IT spending could exceed its base projections.

But a dramatic downturn in the markets, a virtual chokehold on credit availability, and a financial crisis that has rapidly spread from the U.S. to world markets has prompted the research firm to revise its "alternative view" from that September report.

Forrester is now warning IT spending growth in the U.S. could come in at 2 to 3 percent for 2009 and 3 to 4 percent worldwide. And the research firm noted that some of the quarters in 2009 may actually post declines in IT spending.

"Usually, we don't change our forecast that frequently. We'll usually update it every quarter and the changes are small, like maybe 5 percent to 6 percent," said Andrew Bartels, a Forrester research analyst. "But it's been hard to ignore what's been happening in the markets in the last three weeks and we needed to take note of it in our forecast."

Forrester, however, accounted for weakness in the economy when it updated its September forecast and, as a result, has no current plans to change its base forecast. Bartels added that, given the lack of visibility companies have in this current market, it's premature to issue a completely revised 2009 outlook.

That said, Bartels is hoping companies will use Forrester's revised best-case-worst-case scenario update to make conservative plans for their businesses.

"They should assume our base is what's going to happen, but also prepare for the alternative," Bartels noted.

 

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