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Thai floods and weak economy hit IT spending forecasts

Simon Quicke

The ongoing impact of the Thailand floods, coupled with faltering economic conditions across Europe have been highlighted as two of thew reasons Gartner has downgraded its forecasts for worldwide IT spending this year.

The analyst house had originally predicted that spending would hit the 4.6% growth mark this year but this has now been revised downwards to a 3.7% rise over last year.

All of the major sectors - hardware, enterprise software, IT services and telecoms equipment and services - will now see slower growth than originally expected.


  "Faltering global economic growth, the Eurozone crisis and the impact of Thailand's floods on hard-disk drive (HDD) production have all taken their toll on the outlook for IT spending," said Richard Gordon, research vice president at Gartner.

The fall out from the Thai floods will continue to be felt well into the middle of this year and even into next as the flooded production facilities get themselves back up to running at full capacity.

"Thailand has been a major hub for hard-drive manufacturing, both for finished goods and components," Gordon added "We estimate the supply of hard drives will be reduced by as much as 25 per cent (and possibly more) during the next six to nine months. Rebuilding the destroyed manufacturing facilities will also take time and the effects of this will continue to ripple throughout 2012 and very likely into 2013."
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