IDC Reports Turnaround in IT Spending
It seems like it’s been nothing but bad news for IT pros for a long time now, but industry analyst firm IDC recently announced some good news. Following two years of record declines and a recession, the IT industry is gradually returning to positive growth this year, and IDC expects continuing recovery in 2004.
According to the third quarter, 2003 version of the IDC Black Book, worldwide IT spending is set for 5 percent growth in 2004, to $916 billion. These forecasts are based on conservative economic assumptions, according to Stephen Minton, IT spending analyst at IDC. “If the recent announcement of surging economic growth in the U.S. is sustained, we can look forward to a further uptick in IT spending expectations,” he said.
The U.S. economy grew at a 7.2 percent rate in the third quarter of 2003, and on Friday, Nov. 7, the U.S. Labor Department reported a drop in unemployment to 6 percent for the month of October. All of this is potentially good news for the beleaguered IT sector, which has seen less spending, fewer available jobs and an increasing trend of offshore outsourcing.
“The recent economic improvements will undoubtedly be good for many IT vendors, though growth will not return to dot-com heights,” said Minton. “Pent-up demand within IT departments, particularly for mission-critical infrastructure, has reached unprecedented levels.”
According to the new IT Black Book from IDC, which collects IT spending data from 55 countries, spending in 2003 will return to positive growth in the United States and emerging markets. Worldwide growth, though, is expected to be hindered by declines in Europe, Japan and Canada. The gradual recovery in software and services spending should increase in 2004 as business confidence improves.
For more information on IDC’s 3Q03 Worldwide Black Book, go to http://www.idc.com.
Emily Hollis is associate editor for Certification Magazine. She can be reached at email@example.com.