Global research firm Forrester Research has revised downwards its estimate for US and global IT spends this year. It has forecast a 5.1% dip in IT spending by US companies and the government, against a previously forecast 3.1% decline.
For the world as a whole, it forecasts a 10.6% drop this year,steeper than its earlier prediction of a 3% dip.
The research firm, however, said the greater than expected drop in spending in the first quarter has not sustained. "The big drops are not precursors to further declines; rather, we think they are evidence of a temporary pause in US tech purchases, which we expect to start recovering in Q4 as businesses realise that they overreacted in the first quarter," said Andrew Bartels, Forrester Research vice-president and principal analyst.
The report, based on data from governments and 49 large IT vendors, said the recovery will start in the US in the fourth quarter this year. The turnaround in the US will be followed by recoveries in Europe and Asia in the first half of 2010, it said.
There was a silver lining for India, which exports around $50 billion (Rs2.4 lakh crore) of software and services, more than half of it to the US. Software will be the most resilient among the segments, declining only 8.2% this year, followed by outsourcing services at 8.6%. The worst off will be the computer equipment market, to decline by 13.5%, followed by communications equipment, which will drop 12.4% this year.
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