Canada IT Market Outlook: 2008 To 2009

The Canadian IT market has been a challenging one for vendors for the past year or so, but there are prospects for improvement. Forrester projects that IT purchases by Canadian businesses and governments in Canadian dollars will grow by just 3% in 2008, but by 9% in US dollars due to the Canadian dollar's gain in value against the US dollar since 2007. Computer equipment investment in Canadian dollars will decline by 4% in 2008, but purchases of IT services, communications equipment, and software will grow by 5% to 6%, and IT outsourcing will increase by 2%. The timing of the slowdown in the Canadian IT market will be different from the US, with the Canadian slowdown coming in the first half of 2008 and the US slowdown in the second half. The Canadian economy has been marked by weakness in the manufacturing sector in eastern Canada thanks to the strong Canadian dollar and its damage to Canadian exports. However, the booming Canadian energy and natural resources sector in western Canada will provide a lift to the economy in the second half, leading to a recovery in the IT market that will carry into 2009.