Forrester warns IT suppliers to prepare for a long recession


Forrester warns IT suppliers to prepare for a long recession

Antony Savvas

Analyst Forrester has warned IT suppliers to expect a prolonged downturn in sales as the recession begins to bite.

Forrester analyst Andrew Bartels said, "In our third quarter review of the US IT market we predicted a distinct slowdown in growth for US business and government purchases of technology goods and services.

"Since then, an acute financial crisis has hit not only the US but also countries in Europe and Asia. Stock markets have fallen at a pace not seen since the 1929 stock market crash and short-term credit has dried up."

Although governments have stepped in to alleviate the crisis by pumping cash into their economies, Forrester says any recession will not be short-term.

Bartels said, "Risks have grown that the US and other major countries will experience a longer and deeper recession than we had expected. If so, the tech market will see several quarters of declines in purchases, not just two or three quarters, with little or no growth in late 2008 and the first half of 2009."

Analyst Gartner has already halved its original forecast for overall global IT spending growth for next year. Much of this growth will be in developing markets.

More on IT spending:

Gartner halves IT spending forecast for 2009 >>

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