US Tech Market Outlook For 2012

The US tech market posted weaker growth in 2011 than we expected; the outlook for 2012 is for more of the same, with business and government purchases of IT goods and services growing by 6.8% to 6.6% each year. That is almost twice as fast as the 4% growth we expect for US nominal GDP, but macroeconomic weakness is still taking a toll on the US IT market. Hardware and telecom services vendors should expect slowing growth in 2012, while IT consulting and systems integration vendors will see continued above-average growth; software spending growth will pick up slightly. Cloud and Smart Computing solution vendors will continue to outperform their industry baselines. Growth will be relatively balanced across industries, while government purchases will remain weak. Apart from Apple, the consumer information and communications technology (ICT) market will offer slower growth prospects for tech vendors than the business/government ICT market. Tech vendors will need good navigation to catch the strong winds of growth, avoid the areas of doldrums, and swing around the eddies from stalemated federal economic policy and budget-cutting state governments.