Business and IT execs diverge on spending plans
By Staff -- Manufacturing Business Technology, 9/1/2005 6:00:00 AM
While IT spending expectations remain a full percentage point above U.S. overall growth forecast at 5 percent over the next 12 months—this according to Framingham, Mass.-based IDC's July FutureScan assessment of IT industry indicators and customer surveys—a recent softening in industrial activity and uncertainties around energy costs and interest rates spell divergence in spending projections among CIOs and line-of-business decision-makers.
"The possibility of an economic slowdown seems to be holding back the investment outlook of some business executives," says Carol Glasheen, program VP for IDC's Global Research Organization. "Although it is too early to tell whether any of the macroeconomic uncertainties will fully materialize—or what impact they may have on the economy overall—their presence on the horizon appears to be influencing spending mind-sets of these business managers."
In the first part of the year, buying intentions among the decision makers tracked fairly closely, yet July data reveals a more conservative approach among business managers.
The July market indicators that IDC tracks—including S&P 500 performance and 2005 GDP forecasts—actually improved, leading to predictions of continued improvement in corporate profits, but not enough to override growing concern over signs of uncertainty in other areas.
"If this outlook holds, buyer expectations for the months ahead will continue to drift downward," concludes Glasheen.
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