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Thursday, 02 July 2009 03:39

IT spending and hiring down but may soon bounce back

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As the midyear surveys continue to come out, Forrester Research has revised its projection of global IT spending for 2009 downward but says that may be a good thing, and UK recruiter CV Screen reports demand for IT personnel is up.

Yesterday brought news of Janco Associates' survey of IT salaries in the U.S., which found most of them dropping.

 Today comes Forrester's "US And Global IT Market Outlook: Q2 2009 ," in which the research company downgrades its projections for IT spending both in the U.S. and globally.

At the beginning of the year, Forrester projected a 3 percent decline in "global purchases of IT goods and services by businesses and governments" in 2009, as measured in U.S. dollars.

The company also predicted a 3.1 percent decline in the U.S. market.

Those numbers have been revised upwards, to a 10.6 percent decline globally and a 5.1 percent decline in the U.S. Some of the difference globally is due to the fact that the projections are in the dollars, a currency which has been growing stronger recently.

Nevertheless, the researchers still expect U.S. IT investment to start to pick up this year, and that the strong dip may be a sign of long-term health.

"While Q1 2009 saw a scary drop in purchases in the US tech market," said Andrew Bartels, Forrester Research vice president and principal analyst, "ironically that is good news for the long run and we expect to see a stronger rebound sooner. The big drops are not precursors to further declines; rather, we think they are evidence of a temporary pause in US tech purchases, which we expect to start recovering in Q4 as businesses realize that they overreacted in the first quarter."

Bartels also said, "We also expect that tech markets in Europe and Asia will start to recover in the first half of 2010."

For more signs of European recovery, see Page 2.


As reported in The Register, UK recruiting agency CV Screen has noted an improvement in the job market for IT staff in Britain.

It was just last May that CV Screen reported that IT salaries in the UK had fallen by 1 percent in the past year, and the company said it expected salaries to remain stagnant for the next year and a half.

Now, though, CV Screen director Iveson says, "Following a tough first quarter to the year, we are seeing signs that optimism is returning to the industry and we fully expect that the second half of the year will be a busier time for the IT jobs market."

Iveson told The Register that his firm has seen a 25 percent increase in demand for staff and a 27 percent drop in the number of applicants for each spot.

He also said that earlier this year, the demand was greater for contractors, but now companies are hiring permanent staff again.

PHP, Linux, and SharePoint skills are most in demand, the company reported.

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