IT Spending Rounds a 'Turning Point'

Public and retail sectors lead the way, while communications companies lag, a new survey finds.
Posted December 24, 2003
By

Colin C. Haley


Thanks to the public and retail sectors, overall IT spending is continuing its slow rebound, according to a new survey from consultants Wendover and Global Insight.

The Wendover-Global Insight IT Spending Index, which measures the intentions of IT decision-makers to invest in near-term capital projects, rose 19 percent to 49.5 in October. The jump comes after the Index rose 10 percent from the second quarter to the third quarter.

The Index is pegged at 100 points, a high point based on spending for IT equipment and software for the fourth quarter of 1999.

"While it is difficult at this point to detect the magnitude of a potential upward trend due to the effects of seasonality, quarter-over-quarter changes...provide some reinforcing evidence that IT spending may have passed a turning point," the report said.

Spending remained constant in the public sector, which includes education and social service agencies, while wholesale trade and retail trade have shown growth for several months and should keep pace with a strengthening economy.

But not all industries are opening their coffers. New IT spending continues to be slow in the communications sector, which was especially hard hit by the economic downturn, the survey found.

Wendover completes 133,000 surveys annually with IT decision-makers at 80,000 of the largest corporations throughout the United States and the United Kingdom, including every Fortune 500 corporation.

Spokespeople for Wendover and Global Insight were not immediately available for comment.

The trends represented in the Index are consistent with other research. A recent report from IDC predicts that IT spending will return to "solid positive growth" next year.

The resurgence, however, will come in the form of standards-based commodity computing, reflecting the conservative budgets many IT managers are working with, the Framingham, Mass.-based research firm said.

Buying decision will reflect "CEO-level business priorities, such as improved product development and management, new regulatory reporting requirements, the continued pursuit of a single customer view, and the expansion of business services," IDC said.






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