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IT spending to resume in US Next Year

IT spending to resume in US Next Year

After a year of budget cuts, layoffs, and delayed projects, IT executives can look forward to 2010 as a period of stabilization and rebuilding. Our annual fourth-quarter economic outlook survey shows that IT budgets will rise about 2.0% at the median in the coming year.

As one might expect, the outlook for 2010 appears upbeat only in comparison to an anxiety-filled 2009. To assess the current state of affairs, we first asked IT executives in our November survey of 139 organisations in the U.S. and Canada whether their companies made any changes to their IT operational budgets over the past three months. As Figure 1 shows, the answer for nearly half of the organisations was "Yes." While 19% increased their IT budgets, 29% continued to squeeze costs out of their spending plans as they approached the end of the year.

This is a bearish outcome. At best, it is more upbeat than responses to the same question at this time a year ago, when 35% were reducing budgets and only 11% were increasing spending plans. At that point, however, business leaders were worrying about the possibility of a global financial meltdown. This year, IT organisations are continuing to restrain spending as they approach year-end. Despite this, many of those same organisations anticipate a green light to raise spending in the year ahead.


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