U.S. businesses reduced 2001 computer-related spending more than was expected before the Sept. 11 terrorist attacks and will spend less than forecast next year, a market analyst’s report said.
Before the attacks, information-technology spending in 2001 was estimated to fall 3 percent from 2000, according to Giga Information Group Inc. Spending is now estimated to decline by as much as 5.3 percent this year and recover next year by 3.9 percent, the report states. Giga had forecast a 2002 spending increase of 7 percent.
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Corporations cut information-technology spending this year as the U.S entered a recession in March and amid concerns about the severity of the slumping economy. The attacks further undermined corporate and consumer confidence, the report said.
“It’s very clear that Sept. 11 was a major shock and affected the attitudes of those responsible for making decisions on spending,” said Andrew Bartels, Giga vice president and the report’s lead author.
The decline this year follows greater than 20 percent growth in business computer spending in 1999 and 2000, the report said. In 1999, U.S businesses spent about $640 billion on information technology. That rose to $792 billion in 2000, and is predicted to fall to $750 billion this year, Cambridge, Massachusetts-based Giga said. Spending is expected to rise to $779 billion next year, the report states.
Bloomberg
