Tech recession 'is unofficially over'

Forrester report says technology spending will climb in 2010, ending its long tailspin.

An investor in China looks at the situation of the market index in front of computer. The tech economy will rebound in 2010, according to Forrester.

After an extended slump, technology spending will rev back to life in 2010, according to analyst firm Forrester.

"The technology downturn of 2008 and 2009 is unofficially over," says Andrew Bartels, Forrester analyst and vice president, in a research brief. "All the pieces are in place for a 2010 tech-spending rebound. In the U.S., the tech recovery will be much stronger than the overall economic recovery."

Forrester's global report found an 8.2 percent drop in US tech spending in 2009, but predicted the market would grow 6.6 percent this year.

What countries will lead this revival? Curiously, the answer comes in two parts. Because of economic quirks, Europe will likely deliver the biggest spike when measured in US dollars; however, America will pack a heavy punch when measured in local currencies around the world.

So, who's buying? Companies and governments will recover their balance as the economy settles, and will begin updating their computer systems, according to Forrester. "Growth will start slowly in 2010 but pick up steam later in the year, with computer equipment (especially PCs and storage) and software leading the way, and IT consulting services following," Bartels says.

Should Forrester's initial forecast prove wrong, and the economy slide into a "double-dip" recession, 2010 will still be a better year than 2009, the report says. While such a scenario is unlikely – Forrester suggests there's a 15 percent chance of another sluggish year – it would mean technology spending will dip another 3 to 4 percent before the end of the year.


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