US And Global IT Market Outlook: Q3 2009

Forrester stays steady with our earlier projections — the US tech market will start to recover from the downturn in Q4 2009, with the global tech market improving in 2010. As we expected, Q2 2009 was another down quarter in the US and in other markets. Upward revisions to US IT investment data in 2007 and 2008 by the US Department of Commerce raised the base periods for measuring 2009 growth, making the 2009 declines even greater than before (-9.3% in this forecast, compared with a 5.1% decline in our June forecast). Those revisions confirmed our position that a tech boom was starting to take shape in 2008, before being rudely interrupted by the September financial crisis. The lingering effects of that financial crisis continued to hurt IT capital investments in Q2 2009, especially in computer equipment, network equipment, and licensed software, as companies stopped investing and hoarded cash. However, the weak results in early 2009 also mean that the market will hit bottom sooner, setting a low base for year-over-year growth starting in Q4 2009 and into 2010. Vendors need to look beyond the downturn and get prepared for a strong tech recovery in late 2009 and 2010.