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Global tech outlook cut on US recession fears

(SAN FRANCISCO) Two leading technology research firms have cut global technology outlook for this year, citing the risk of a US recession.

Forrester Research Inc said it now expects global technology purchases to grow 6 per cent in dollar terms this year, down from an earlier projection of 9 per cent. It expects US purchases of technology goods and services to grow 2.8 per cent, down from a previous forecast of 4.6 per cent.

The revisions assume a mild recession in the United States in the first two to three quarters of 2008, Forrester said on Sunday. The US accounts for about a third of global technology purchases.

‘While it is by no means certain that the US economy will in fact experience a recession, the risks of one are high enough to justify a more conservative outlook,’ Forrester vice-president Andrew Bartels said.

IDC also lowered its global outlook, citing similar concerns. It said on Monday it now expects worldwide IT market growth of 5 per cent this year, down from its previous forecast of 5.5 per cent and off from 2007’s 6 per cent.

‘While there is still debate over the severity and length of a US economic slowdown, we do know that the IT market will not escape unscathed from any significant downturn,’ said Stephen Minton, vice-president of Worldwide IT Markets at IDC.

Within technology, software investment will likely do better than the average, growing 8 per cent globally in 2008 but still down from 11 per cent last year, Forrester said.

 

Source: Reuters (Business Times 13 Feb 08)

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