IT goods, services suffer a scary drop

The IT industry will continue to be hit by the recession in 2009 and things are worse than originally thought.

That’s according to Forrester Research, which projects that global buys of IT goods and services by businesses and governments this year will fall by 10.6 percent, compared with the three percent drop it predicted at the beginning of the year.

But the news, according to principal analyst Andrew Bartels, is not as bad as it first appears.

He said: “While Q1 2009 saw a scary drop in purchases in the US tech market, ironically that is good news for the long run and we expect to see a stronger rebound sooner.”  How come? He thinks the big drops won’t be the harbinger of further falls, but “evidence of a further pause in US tech purchases”.

He said that things will start to get better in the four quarter because businesses will realize they overreacted. “Tech markets in Europe and Asia will start to recover in the first half of 2010,” he predicted.

Different sectors show different declines. Forrester thinks that buys of computer equipment will fall 13.5 percent, comms equipment will fall by 12.4 percent, software spending will fall by 8.2 percent, and IT consulting and outsourcing services will be 8.6 percent lower.