Goldman Sachs forecasts slow spending growth

IT belt tightening has continued through the first two months of 2002 with no rebound expected this year, according to a survey...

IT belt tightening has continued through the first two months of 2002 with no rebound expected this year, according to a survey of IT spending released by The Goldman Sachs Group.

Almost 90% of 100 IT managers with strategic decision-making authority at multinational Fortune 1,000 companies believe their long-term spending growth will rise just 10% or less this year. The percentage of IT managers saying that rose from 83% and 70% respectively in Goldman Sachs' January and November surveys.

About one third of the respondents now expect a return to normal IT spending in 2002, while almost two-thirds of those surveyed said normal spending would not return until next year or beyond.

"The implication is that a potent spending recovery in the second half of 2002 feels increasingly unlikely," the report stated.

On the upside, two-thirds of those surveyed indicated that this represents a buyers market, making it easier to pressure vendors into lowering prices. The survey also found that business continuance and security software still hold the top spending slots.

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