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	June 16, 2008 US IT Market Outlook: Q2 2008 Not So Bad So Far — But There Is Worse To Come In The Rest Of The Year by Andrew Bartels with Ellen Daley, Heidi Lo, Madiha Ashour	Average: 10  (1 rating)

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Executive Summary

With Q1 2008 data now in for both the US economy and the US tech market, the year has started out much as we expected. The data so far supports our projection that the US market for technology goods and services will see a slowdown in growth in 2008, to 3% from 6% in 2007. This slow growth rate is mainly due to an assumed mild, two-quarter recession in the US economy. However, the Q1 economic data showed that the US economy was still growing, albeit sluggishly. The IT market data also showed weak but positive growth, with surprising strength in IT services and outsourcing. While some optimists think that these are signs that the US economy will avoid a recession, the effects of higher gasoline prices and declining employment are more likely to mean that both US economic activity and IT purchases will turn down in Q2 and Q3. On a positive note, both the economy and the US tech market will start to improve in Q4, with tech purchases poised for much stronger growth in 2009.

TABLE OF CONTENTS

• Forrester's 2008 US IT Market Outlook Still Shows Slow Growth
• Q1 2008 IT Purchases Data Showed Slowing, But Still Positive, Growth
• A Mild US Recession Will Slow, But Not Stop, IT Purchases Growth in 2008

RECOMMENDATIONS

• Vendors Need To Hunker Down For A Tough 2008, Despite A Good Q1

WHAT IT MEANS

• A Recession Will Dampen, But Not Kill, The US Tech Sector This Time

ALTERNATIVE VIEW

• The 2008 IT Market Heads South Because The US Recession Is Deep And Long
• Supplemental Material
• Related Research Documents

This is an excerpt