The idea that 2003 could be a recovery year for the technology economy may be far-fetched, according to a study of 752 companies spanning 53 business sectors, released by analyst firm The Goldman Sachs Group Inc.
Based on reported corporate capital expenditures in 2001 and 2002, and projected expenditures for 2003, the study predicted an overall decline of 10 per cent in capital expenditures this year. That would come on top of a 15 per cent decline last year. The report concludes that the direction of IT spending will “remain on the downside” through the year.
The study doesn’t include all IT spending sources. Among areas omitted are the commercial banking sector and government IT spending.
While adjustments could take place within companies, “the magnitude of cutbacks already in place seems to support what could be another disappointing year for IT spending,” the report said.
In the financial services market, which is the largest for IT spending, a small increase of four per cent is expected for 2003, according to the study. That would compare to a 25 per cent decline last year.
In the communications market, IT spending is expected to “retreat from steep declines in 2002, but [Goldman Sachs] still expects spending to be down 12 per cent.”
In manufacturing, IT spending is projected to increase overall by five per cent, compared with last year’s drop of 16 per cent. And in the IT market itself, IT spending is projected to be down by five per cent, compared with a hefty 33 per cent decline in 2002.
