Data Overview Report

Canadian Tech Budget Outlooks In A COVID-19 Recession

A Best-Case Scenario Of A 6.7% Drop In Tech Spending In 2020 And An Alternate Scenario Of An 11.3% Decline With Weak 2021 Growth

July 7th, 2020
Cheryl McKinnon, Principal Analyst
Cheryl McKinnon Principal Analyst
Andrew Bartels, null
Andrew Bartels
With contributors:
Pascal Matzke , Audrey Hecht

Summary

Canada's economy had been slowing in late 2019, putting downward pressure on its tech market coming into 2020. The COVID-19 virus and Canada's containment efforts have pushed Canada into a recession, which will in turn cause Canadian tech purchases to drop. We see two possible macroeconomic scenarios playing out for Canada. Scenario A, a relatively short two-quarter recession lasting through Q3 2020 with a recovery in Q4, would cause Canadian tech purchases to fall by 6.7% in 2020, with a 3.4% recovery in 2021. Scenario B, with a recession that lasts into 2021, would lead to an 11.3% tech downturn in 2020, with 2.6% growth in 2021. CIOs and their business partners can use these scenarios to plan their tech budget responses to these adverse conditions.

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