Forrester slices 2009 IT spending projection

IT spending in the U.S. this year is expected to nearly double previous forecasts, while next year's projections are virtually cut in half, according to Forrester Research.

Dawn Kawamoto
Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.

IT spending got a dose of good-news-bad-news Tuesday, with Forrester Research nearly doubling its projections for increased U.S. spending this year and virtually slicing growth for next year.

IT spending is expected to rise 5.4 percent this year, revised from previous Forrester projections of a 2.8 percent increase.

But next year, growth in IT spending is expected to get whacked down to 6.1 percent from previous projections of a 10 percent increase.

Forrester, which revises its annual projections on a quarterly basis to reflect changes in the economy, attributed the changes to its most recent projections based on the drama that is sweeping across the economy and world markets.

"We think the economy will turn (for the worse) in the third quarter, and if that happens, we'll see a significant slowdown in IT spending in the fourth quarter and then the first and second quarters," said Andrew Bartels, a research analyst with Forrester Research.

Forrester anticipates IT spending will improve in the second half of next year, as the current credit crunch improves, cost of energy and oil come down, and the benefits of lower interest rates begin to take hold.

And because IT spending, despite the downturn, is expected to continue growing, spending on everything from mobile to software-oriented architecture technologies is expected to accelerate rapidly once CIOs feel more confident in the economy, Bartels noted.

Added Bartels: "As soon as the economic climate gets better, CIOs will go out and get this stuff."