IDC Forecasts Worldwide IT Spending Growth of 0.5% in 2009

The continued erosion of the global economy, including the prospect of negative GDP growth in many major countries, has led IDC to update its forecast for worldwide IT spending in 2009. The IDC Black Book now forecasts worldwide IT spending will grow by just 0.5% year over year in 2009 in constant currency, down from a November 2008 forecast of 2.6% growth. If recent exchange rate trends continue, this will translate into a significant decline in revenues for U.S.-based IT suppliers.

The greatest impact will be felt in global hardware markets, where overall spending growth will be -- 3.6% this year, led by a steep decline in outlays for servers, PCs, and printers/MFPs. In contrast, worldwide spending on software and IT services are each expected to grow 3.4% in 2009, down from 4.6% and 3.7% growth respectively in the previous forecast. Worldwide IT spending in 2009 will be $1.44 trillion.

In the United States, IDC is now forecasting year-over-year growth of 0.1% in overall IT spending, down from the November forecast of 0.9% growth. Paralleling the worldwide market, hardware will experience a sharp decline in spending with -- 16% growth while software and IT services spending will grow by 4% and 3% respectively. U.S. IT spending will total nearly $491 billion in 2009.

Other highlights from the new IDC Black Book include the following:

--Overall IT spending in Western Europe is now expected to grow 0.1% year over year in 2009, down from the November forecast of 1.2% growth. IDC expects IT spending in Germany and the United Kingdom to remain essentially flat in 2009, while France and Italy will experience negative growth.

--The forecast for IT spending growth in Asia/Pacific (excluding Japan) has also been reduced, with overall growth now expected to be 1.4%, down from the earlier forecast of 4% growth. IT spending in China is expected to grow 6.5%, down from 9.1%, and India's growth has been reduced to 5.7% from 10%.

--Japan will experience year-over-year IT spending growth of 1.8% in 2009, down from the previous forecast of 1.0% growth.

--Latin America will enjoy gains in all three market segments, driving overall IT spending to 4% growth in 2009, down from the November forecast of 8%. IT spending in Brazil will grow by 6% in 2009, down somewhat from the 9% forecast in November.

--In Central and Eastern Europe, IT spending will grow -- 7.5% in 2009 as a result of worsening economic assumptions and business climate volatility.

--The Middle East & Africa is expected to continue on a growth trajectory of almost 8% in 2009, down slightly from the November forecast of 8.5% growth.

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