Forrester: Much larger than expected decline in 2009 US IT buys

2009 US IT purchases will be much lower than expected but the worst of the decline seems to be over...

Forrester updated its 2009 US IT purchasing forecast saying that it will be a larger decline than it previously expected.

The market research firm now expects a 9.3 per cent drop in 2009 US IT purchases compared to its June forecast of a 5.1 per cent decline.

Forrester analyst Andrew Bartels says this is due to two reasons:

First, cutbacks in capital investment, which had earlier been confined to computer and communications equipment, spread in the first half of 2009 to licensed software, causing big declines in this category of tech purchases. Second, upward revisions to US IT investment data in 2007 and 2008 by the US Department of Commerce raised the base periods for measuring 2009 growth, making the 2009 declines even greater than before.

The good news is that the worst of the tech decline is over and 2010 should show a strong recovery.

...calendar Q4 2009 revenues should be close to even with year-earlier levels, and in many cases will be positive, especially for US vendors reporting dollar revenues.