The continued erosion of the global economy, including the prospect of negative GDP growth in many major countries, has led IDC to update its forecast for worldwide IT spending in 2009. The IDC Black Book now forecasts worldwide IT spending will grow by just 0.5% on year in 2009 in constant currency, down from a November 2008 forecast of 2.6% growth. If recent exchange rate trends continue, this will translate into a significant decline in revenues for US-based IT suppliers.

The greatest impact will be felt in global hardware markets, where overall spending growth will be negative 3.6% this year, led by a steep decline in outlays for servers, PCs, and printers/MFPs. In contrast, worldwide spending on software and IT services are each expected to grow 3.4% in 2009, down from 4.6% and 3.7% growth, respectively, in the previous forecast. Worldwide IT spending in 2009 will be US$1.44 trillion, said IDC.

In the US, IDC is now forecasting on-year growth of 0.1% in overall IT spending, down from the November forecast of 0.9% growth. Paralleling the worldwide market, hardware will experience a sharp decline in spending with negative 7.4% growth while software and IT services spending will grow by 4% and 3%, respectively. US IT spending will total nearly US$491 billion in 2009.

“Fourth-quarter data from a number of key markets and geographies clearly show that companies have been very quick to pull back their spending,” said John Gantz, chief research officer at IDC. “The data also provides a clearer picture of how companies are curbing their expenditures. Investments in software and services are being maintained in pursuit of productivity and efficiency gains while hardware spending is being slashed in an attempt to stretch refresh cycles and squeeze more out of existing assets.”

Overall IT spending in Western Europe is now expected to grow 0.1% on year in 2009, down from the November forecast of 1.2% growth. IDC expects IT spending in Germany and the UK to remain essentially flat in 2009, while France and Italy will experience negative growth.

The forecast for IT spending growth in Asia/Pacific (excluding Japan) has also been reduced, with overall growth now expected to be 1.4%, down from the earlier forecast of 4% growth. IT spending in China is expected to grow 6.5%, down from 9.1%, and India’s growth has been reduced to 5.7% from 10%.

Japan will experience on-year IT spending growth of negative 1.8% in 2009, down from the previous forecast of 1% growth.

Latin America will enjoy gains in all three market segments, driving overall IT spending to 4% growth in 2009, down from the November forecast of 8%. IT spending in Brazil will grow by 6% in 2009, down somewhat from the 9% forecast in November, IDC noted.

In Central and Eastern Europe, IT spending will grow by negative 7.5% in 2009 as a result of worsening economic assumptions and business climate volatility.

The Middle East and Africa is expected to continue on a growth trajectory of almost 8% in 2009, down slightly from the November forecast of 8.5% growth.

“The revised forecast is very close to the downside scenario we developed in November, which was based on the lowest worldwide GDP growth since World War II,” noted Stephen Minton, vice president, Worldwide Markets and Strategies at IDC. “While the outlook for 2009 is now worse than we thought just three months ago, we still expect IT spending to recover somewhat in 2010 and gain momentum through the rest of the forecast period.”