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IDC's FutureScan on IT spending growth in 2005: More of the Same
FRAMINGHAM, Mass., December 31, 2004 IDC today announced the latest FutureScan results for the month of January. From what buyers believe about their IT spending growth in 2005 and from the macroeconomic indicators, 2005 looks to be a repeat of 2004. The forward-looking macroeconomic picture remained virtually unchanged from December's FutureScan, while buyer expectations dipped, with the FutureScan Buyer Intent metric dropping from 1088 to 1075.
"All year long the market indicators have been cooling," noted John Gantz, IDC's Chief Research Officer. "The slight rise in the stock market in recent weeks has been countered by GDP and profit growth expectations for 2005 that are lower than 2004, as well as lower forecasts for vendor revenue growth and rising interest rates."
Buyer expectations, at their lowest in January, peaked in the summer, and since then have been trending slowly down.
"Together," says Gantz, "these supply and demand side indicators point to a growth in IT spending in 2005 between 4%-8%, which perfectly brackets IDC's current forecast for U.S. IT spending of 5.8%. But the indicators are still showing a disparity between forecasts of vendor revenues and buyer expectations of IT spending growth. That will obviously even out as 2005 progresses."
This month, line-of-business executives polled were slightly less bullish than IT executives, but primarily in small companies. Business executives in larger companies have had higher expectations for IT spending than their IT counterparts for the last several months.
FutureScan is a set of market metrics that measure supply and demand in the IT industry based on leading indicators and customer surveys. Values 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.
FutureScan results for January and prior months can be viewed at http://www.idc.com/futurescan.
"All year long the market indicators have been cooling," noted John Gantz, IDC's Chief Research Officer. "The slight rise in the stock market in recent weeks has been countered by GDP and profit growth expectations for 2005 that are lower than 2004, as well as lower forecasts for vendor revenue growth and rising interest rates."
Buyer expectations, at their lowest in January, peaked in the summer, and since then have been trending slowly down.
"Together," says Gantz, "these supply and demand side indicators point to a growth in IT spending in 2005 between 4%-8%, which perfectly brackets IDC's current forecast for U.S. IT spending of 5.8%. But the indicators are still showing a disparity between forecasts of vendor revenues and buyer expectations of IT spending growth. That will obviously even out as 2005 progresses."
This month, line-of-business executives polled were slightly less bullish than IT executives, but primarily in small companies. Business executives in larger companies have had higher expectations for IT spending than their IT counterparts for the last several months.
FutureScan is a set of market metrics that measure supply and demand in the IT industry based on leading indicators and customer surveys. Values 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.
FutureScan results for January and prior months can be viewed at http://www.idc.com/futurescan.
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