IDC announced that it has lowered its forecasts for IT spending in 2008, due to recent downward revisions to macroeconomic indicators and assumptions. As a result of these changes, IDC now predicts worldwide IT market growth of 5% this year, down from last year's pace of 6%. Global IT spending is now projected to reach $1.38 trillion this year, up from just over $1.3 trillion in 2007. In the United States, growth is expected to weaken to 4% in 2008, compared with 6% in 2007.
These updated forecasts, published in the IDC Worldwide Black Book, reflect the negative change to economic indicators and projections since the previous quarter. The general reduction in anticipated growth for the U.S. economy has translated into forecast reductions across most IT market sectors. Additionally, historical correlations and recent IT buyer surveys confirm the view that market conditions are likely to weaken in the coming months.
Highlights of the new IDC Black Book include the following:
- A 5% decline is expected for the U.S. PC market in 2008, following last year's growth of 2%.
- Slower growth is now expected for software, services, storage, servers, and network equipment in the United States.
- IT spending in Western Europe is expected to grow by just 4% this year, down from last year's 5%.
- Market growth is expected to be just 2% in Japan this year.
- Slower growth in China compared to last year (12% in 2008 compared to 17% in 2007).
- India is one of the few markets expected to post an acceleration from 2007 growth.
Economic indicators are the biggest source of variability within the forecast. Any further weakening of the U.S. economy in the coming weeks, including recessionary conditions, could force IT market growth even lower. On the upside, a quick recovery for the U.S. and global economy may elevate expectations for the second half of this year.
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