IDC Re-Affirms Recovery of IT Spending – Strong Rebound In Second Half Of 2002

FRAMINGHAM, MA – APRIL 17, 2002 – IDC today re-affirmed its prediction of a strong recovery in IT spending before the end of 2002, in spite of negative earnings statements that have continued into the first quarter of the year. In the second half of 2002, economic recovery will translate into improved business profitability, with a consequent, positive impact on IT spending budgets.

 

IDC recently completed its quarterly update of IT spending in 54 countries, through its industry-leading Worldwide Black Book research study. The new Black Book calls for a 5% increase in total worldwide IT spending this year, increasing to 10% growth in 2003 as most market segments return to previous growth levels. In the US, total IT spending growth this year will be 4%, before reaching 9% in 2003.

"There is always a lag of up to two quarters, before recovery in macroeconomic indicators translates into a strong recovery of business profits, confidence and visibility," said Stephen Minton, Program Director of IDC Worldwide IT Markets & Strategies. "In line with economic forecasts, we continue to expect that the overall rebound in IT spending will begin to occur by the middle of 2002."

In the US, hardware spending will decline by a further 8% this year, a further deterioration from the downturn of 2001. Price competition continues to impact the PC sector. Software spending, on the other hand, will recover to 9% growth in the US this year over the full twelve months.

"The business environment remained challenging for IT vendors in the first quarter," said Minton. "Many customers are taking a wait-and-see approach before increasing their IT budgets. Our end-user surveys conducted during Q1, however, indicate strong drivers for IT spending increases in the second half of this year. We remain bullish on the medium and long-term outlook." IT spending in regions:

In Western Europe, total IT growth this year will be 6%, despite a 2% decline in hardware spending;

In Japan, where the economic recession continues to impact IT spending, year-on-year growth will be virtually flat;

In other parts of Asia Pacific, however, growth will be stronger. In China, IT spending growth will reach 24% this year.

The IDC Worldwide Black Book (IDC #26893) contains full market sizing and forecasts for IT spending in 54 countries, across 25 market segments, updated at the end of each quarter.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com. IDC is a division of IDG, the world's leading IT media, research and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.