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Forrester: IT spending growth holding up

Asia and Latin America counterbalance Europe

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The prognosticators at IT watcher Forrester Research are not letting a little debt crisis in Greece and the fears by some that it will "metastasize across the European Union" put a damper on global IT spending growth for 2010.

In a report released this week from Andrew Bartels, the vice president and principal analyst who is responsible for economic and IT spending modeling at the company, Forrester says that it expects global IT spending to rise by 7.8 per cent this year, to $2.46 trillion, and that tech spending in the United States will rise by 9.9 per cent, to $753bn. If you take out telecommunications from those numbers, you get core IT hardware, software, and services spending in the U.S. coming in at $564bn, with the whole planet spending $1.58 trillion.

"Computer equipment and software will be the strongest categories, with PCs, peripherals, and storage equipment leading the computer category, and operating system software and applications setting the pace for software," Bartels said in his latest forecast for IT spending. "Communications equipment purchases are looking up, especially for enterprise and small and medium-size business (SMB) buying. IT services growth will lag, with systems integration projects waiting for licensed software purchases to rise."

In a blog announcing the new forecast, Bartels said that he had been expecting a relatively weak recovery in the US economy in his 2010 forecasts, so there is no change there. But as European economies have taken a few lumps in early 2010, resulting in reduced IT spending later this year, the economies in Latin America and Asia are doing a bit better than Bartels expected, so it is more or less a wash on a global basis.

In the latest forecast, Canada - yes, Au Canada - will see the highest IT spending growth, rising 16.2 per cent, followed by Latin America (up 15.4 per cent), Asia/Pacific (up 11 per cent), and the combination of Eastern Europe, Africa, and the Middle East rising almost as much (up 10.5 per cent). IT spending in 2010 for Western and Central Europe is expected to dip by seven-tenths of a per cent.

Bartels thinks there is a 25 per cent chance that economic issues in Europe will cause US-based IT companies to sell less wares, slowing IT spending for both the US and the world to the range of 5 to 7 per cent for the whole year. There is an outside chance - on the order of 5 per cent - that the economic crisis in Greece triggers another economic meltdown, whacking IT spending the world over as the effects ripple through all the economies.

As El Reg previously reported, Gartner has cut its global IT spending forecast from 5.3 per cent back to 3.9 per cent for 2010, mainly because of the strengthening of the US dollar (which the dominant IT vendors report their financials in) against other currencies and the expected decline of IT spending in Europe. ®

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