U.S. IT Forecasts Revised: Down in 2009 (no surprise)

Gartner and Forrester have both lowered their expectations of U.S.technology spending this year.

Gartner now forecasts a 3.8 percent drop in spending worldwide to $3,200 billion, compared with the $3,400 billion recorded in 2008. Three months ago, it was predicting a modest rise in spend this year over last year. Gartner points out that the decline it now predicts is worse than the 2.1 percent fall in IT spending in 2001, after the dot-com bubble.

Gartner predicts a 15 percent decline in computer hardware shipments, a three percent fall in telecom spending, a two percent drop in IT services and 0.3 percent growth in software sales.

Forrester now expects information technology sales to shrink by 3.1 percent in 2009, compared with the 1.6 percent it previously suggested.

All analysts overshoot. We extrapolate from past trends, which generally works fine so long as markets are not at turning points. One can almost predict an overshoot to the down side at some point, as trends change again.