Forrester/ITAA US Tech Sector Index: Q1 2007

The health of the US tech sector took a dip in Q1 2007, according to the Forrester/ITAA US Tech Sector Index. The decline had been expected (because cyclical business trends have historically led to a lower reading in the first quarter of a year) and predicted (because several forward-looking elements in last quarter's index had foreshadowed a downturn). The index dropped 2.6 points compared with Q4 2006, although it is still 4.0 points ahead of Q1 2006. First-quarter results were mixed, with six of the 11 underlying measures showing declines for the quarter. The largest drops were in CIO confidence and foreign trade. In addition, IT vendors' revenues continued to fall in the US and started to fall worldwide in Q1 2007. Two of the forward-looking measures fell, while the remaining two remained relatively unchanged. The US tech sector is currently mirroring the slump of the US market after several quarters of doing well in spite of it.