Information Technology Spending to Grow in 2006

Information Technology Spending to Grow in 2006

According to the IDC FutureScan, all the indicators depict an expectation of 5% growth in U.S. IT spending this year. The report says that buyer expectations come in with an index value of 1047 (4.7% expected growth), vendor revenue forecasts come in at 1045, and the macroeconomic indicator at 1059.

John Gantz, IDC's Chief Research Officer, cays "In our world… this (index alignment) doesn’t happen often… While we don't think the indicators will stay this close in future editions of FutureScan, we are gratified that they bracket our official forecast for IT spending."

The indicators actually dropped from last month. "Users were down on the future right after Katrina, and it showed in our surveys," continued Gantz. "Then last month they more than doubled their spending outlook when users realized the economy was still perking... This month they came back to earth. Small business executives were especially realistic."

For January, Buyer Demand Intent for IT products and services over the next 12 months, fell to 1047 from 1072 in December. The Market Indicators number, which combines input from economic and IT industry revenue forecasts, dropped from 1057 to 1051.

Values (of the FutureScan metrics) reflect expectations of future growth, with an index value of 1000 indicating zero growth and each additional 10 points representing roughly 1% of expected growth or contraction.

For more on IDC and FutureScan, please visit here.

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