FROM INTERNET NEWS DOT COM
July 31, 2002
Is the Tech Recession Over?
By Jim Wagner
Corporate America is spending more on IT equipment and services for the first time since late 2000, indicating an end to the recession that has cast a shadow over the entire tech landscape, according to a new report.
The report, released by the U.S. Department of Commerce (DOC) Wednesday, doesn't give the whole picture in IT spending, but is encouraging news for an industry that's seen lagging software and equipment sales the past year-and-a-half. According to the report by the DOC's Bureau of Economic Analysis, equipment and software sales should top out with a modest 2.9 percent gain in the second quarter of 2002.
The sector, according to the report, had previously been dropping since the fourth quarter of 2000, when sales dropped 5.4 percent. Since then, sales have dropped by as much as 16.7 percent per quarter.
For the first time since 2000, IT spending wasn't one of the biggest losers in gross domestic product figures released Wednesday, which show America's output grew overall by only 1.1 percent in the second quarter of 2002.
Barb Gomolski, a research director at the Gartner Group, said these numbers reflect a minor return in confidence with IT spending after the dot com shakedown and subsequent recession.
"There is a feeling that, possibly, among companies that the recession is over with and they recognize they can't under-invest in IT -- IT's too important," she said. "They don't want to run the risk of their competitors coming up with a better business model." |
