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U.S. IT market forecast for 2011 at 8 percent, up from 7.4
By siliconindia
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Tuesday, 12 April 2011, 11:58 IST |
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Bangalore: Citing a strong momentum in business purchases of technology goods and services, Forrester Research has raised its forecast for the U.S. IT market for 2011 to 8 percent ($608B). The previous forecast published in January for the U.S. IT market was at 7.4 percent growth for 2011.
Forrester's VP & Principal Analyst, Andrew Bartels offers the 2011 U.S. Information & Communication technology (ICT) purchase forecast by industry and firm size, and analyses the key forces driving the U.S. tech market growth. Based on the latest 2011 projections, Bartels strongly advises the technology Vendor Strategists 'To prepare for better days, but pick the right growth verticals.'
"We raised our forecast in spite of worries about the strength of the U.S. economic expansion as a result of higher oil and gas prices, government layoffs, and supply chain and trade disruptions from the tragic events in Japan. Why? One reason is that, even with those worries, US economic growth still looks solid albeit weaker than what would be needed to drive a substantial reduction in unemployment. But more important is the strong momentum in business purchases of technology goods and services. 2010 growth in the U.S. tech market turned out to be 8.9 percent, even better than the 8.4 percent growth we projected in April 2010," Bartels said.
The report notes that while the overall U.S. technology market growth of 8.0 percent in 2011 would be a bit slower than the 8.9 percent growth in 2010, this year would still be a bright year for technology vendors. "Yet, based on vendors' own revenue projections, tech vendors still seem to be too cautious in their expectations. One key trend to watch for is vendors upgrading their revenue expectations. Despite the strong 2010, vendors have been very conservative in their forecasts for 2011 revenue growth. Indeed, vendors' projections of 2011 revenue growth - as reflected in the revenue growth forecasts of stock analysts - have been running below our forecasts," states Bartels.
The markets for software and IT consulting and systems integration services will see some of the strongest growth in 2011, with software purchases rising by 8.6 percent and IT consulting and systems integration services up by 8.1 percent ($78B). Computer equipment purchases, which lead the tech market recovery in 2010 with almost 20 percent growth, will slow to a still respectable 7.3 percent in 2011. Communications equipment -- especially for unified communications, video conferencing, and mobility at businesses and governments -- will see 8.3 percent growth in 2011.
IT outsourcing will lag, growing by 7 percent ($104B), and telecommunications services will do even worse, with 3.4 percent growth as the decline in wireline services offsets much of the growth in wireless services.
By industry for total ICT purchases, manufacturing will see the strongest growth in 2011, followed by business services (especially professional services and transportation and equipment). Weakest growth will be in media, entertainment and leisure and especially in the government sector, where budget cutbacks at the Federal, state, and local level will cause almost no growth. Enterprise purchases will do slightly better than purchases by small and mid-size businesses.