NEW YORK (Reuters) - Weakening economies will push spending on information technology products and services down 3 percent this year after seven years of growth, according to Forrester Research.
In its latest report released on Tuesday, the technology research firm said that recessions in the United States and other countries would be the main driver for slower spending and that currency fluctuations will be a secondary factor.
While the research indicated a 3 percent growth rate for 2009 based on a weighted average of local currencies, Forrester said that in U.S. dollar terms the global market would fall 3 percent to $1.66 billion, after rising 8 percent in 2008.
In comparison, technology spending fell 6 percent in both 2001 and 2002, in what was seen as a downturn that was caused
Forrester said that while the weaker U.S. dollar boosted 2008 revenue, it sees a stronger dollar hurting 2009 revenue.
It expects a boost for some companies from the weaker euro in early 2009, including vendors such as Alcatel-Lucent, Ericsson, SAP and Nokia Siemens, a venture of Nokia and Siemens.
But this “is likely to be short-lived once the dollar returns to a lower value against the euro” Forrester said.
While the market will be challenging for all technology spending in 2009, Forrester sees some sectors holding up better than others.
“Software purchases will do a bit better than other categories, but all vendors will face a tough time until late 2009 or early 2010,” according to the report by Forrester vice President Andrew Bartels.
He said 2009 software purchases will be unchanged from 2008 at $388 billion, while the computer market will fall 4 percent to $434 billion for products including personal computers, servers, peripherals and storage gear.
The communications equipment market, including routers, switches and teleconferencing gear, will fall 3 percent to $353 billion in 2009, according to Forrester.
It expects the IT services and outsourcing market to fall 3 percent to $484 billion. Forrester said that IT spending may recover to grow 9 percent in 2010 in terms of U.S. dollars and 6 percent in terms of local currencies.
Reporting by Sinead Carew; editing by Richard Chang