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IT spend to remain flat for this year too
By siliconindia
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Friday, 14 March 2003, 20:30 IST |
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MUMBAI: Though 2003 spending expectations have marginally improved by one per cent from a fall of one per cent in December, majority of key spending indicators have actually pulled back further, says the Goldman Sachs report.
Despite the marginal improvement in 2003 spending expectations, the outlook for the year remains beneath the two to three per cent per cent average growth expectation from fall surveys and well below the normal growth rate of about 10 per cent.
"IT managers point to normal seasonally for March as a best case scenario and the majority have pushed out their anticipation of a spending upturn to 2004 or beyond. Furthermore, the `normal` long-term IT spending growth rate continues to slide, and now sits at 4.3 per cent, down from December's five per cent and significantly below the six to seven per cent range that IT managers had been suggesting for most of 2002."
The `normal` long-term expectation also reached a new low. `Our survey participants now expect a long-term IT spending growth rate of 4.3 per cent, down from the previous low of five per cent suggested two months ago in our December survey.
The new long-term spending growth rate hangs below the six to seven per cent range that our respondents had been pointing to throughout most of 2002 as the future normalised IT spending rate,` the report adds. Most of the respondents to the survey have also cast doubts on the strength of the March quarter.
Nearly three-fourths of IT managers, up from 67 per cent in December, anticipate that budgets will most likely continue to tighten in early 2003. Furthermore, the participants continue to push out any expectation of a pick-up in IT spending, which is now relegated to 2004 or later for almost half of the respondents.