Research by investment bank Goldman Sachs has predicted that corporate IT spending will not stage a full-blown recovery this year as previously hoped.
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The report on US companies forecast that the financial services market, which is the largest for IT spending, will increase spending by 4%, compared with a 25% decline last year.
In manufacturing, IT spending is projected to increase overall by 5%, compared with last year's drop of 16%. And in the IT market itself, IT spending is projected to be down by 5%, compared with a hefty 33% decline in 2002.
In the communications market, IT spending is expected to "retreat from steep declines in 2002, but [Goldman Sachs] still expects spending to be down 12%", the report said.
"This message remains consistent with our view that companies continue to tighten what are, in many cases, already anaemic capital budgets," the report continued. While adjustments could take place within companies, "the magnitude of cutbacks already in place seems to support what could be another disappointing year for IT spending".
The report covered corporate capital expenditures in 2001 and 2002 and the projected expenditures for 2003 of 752 companies spanning 53 business sectors.
Goldman Sachs predicted there would be an overall decline of 10% in capital expenditure this year, on top of a 15% decline last year.