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U.S. tech industry in recovery mode

Recovery is already under way and as the IT market is expected to grow by more than 8 percent this year, says a new report from Forrester.

Emerging from a rough 2009, the technology industry has begun to recover, says a new report from Forrester.

The $741 billion U.S. IT market is now expected to see an 8.4 percent rise in spending this year, according to Forrester's latest "U.S. and Global IT Market Outlook: Q1 2010," released Thursday. The rebound will be more subdued but still solid for the global tech market, now forecast to grow 7.7 percent in U.S. dollars for 2010.

The latest estimate for growth in U.S. tech outshinesForrester's January forecast of 6.6 percent, thanks to higher-than-expected demand for communications equipment. But the new number for gains around the world is lower than the prior projection of 8.1 percent. A stronger dollar and weaker euro as a result of a debt crisis in Greece is now expected to dampen some of the growth globally, says Forrester.

Sales of computer hardware and software will lead the gains for the industry. PCs, peripherals, and storage devices will be top sellers among computer hardware. Operating systems and applications will pave the way for growth in software, according to the report.

Enterprises and SMBs (small and medium businesses) are starting to open their wallets, gradually spending more on computer equipment. But IT services and projects aren't expected to fully ramp up until companies focus more of their budgets on purchases of licensed software.

The largest buyer of technology will be the professional services industry, expected to spend around $103 billion this year. Financial services companies should spend $81 billion, while the government is forecast to devote $71 billion in tax dollars to tech products and services. As the recipients of all that new cash, U.S. manufacturers, financial services firms, utilities, and health care companies will see the greatest gains in 2010.

Across the globe, the United States and Asia Pacific region will see the biggest boosts in technology spending, while Western and Central Europe will grow at a slower pace.