Forrester: Economic Slowdown Should Not Hurt IT Jobs, Salaries

By Deborah Perelman  |  Posted 2007-12-17 Print this article Print

The research firm expects the economy to weaken, but not slide into a recession.

Given the darkening U.S. economic outlook, Forrester Research is updating its IT spending outlook for 2008.

However, as long as the U.S. economy has only two to three quarters of very weak real GDP (gross domestic product) growth—1 to 2 percent—but no recession in 2008, analysts don't feel that the slowdown will have any negative impacts on IT hiring or salaries.

"If we are correct in our forecast, we will end up with a slightly slowing down economic growth, near a recession level but not actually a recession. IT spending will slow, but not go into the negative," Forrester analyst Andrew Bartels told eWEEK.

The Forrester analysts lowered their projections for IT hardware and software growth from the 8 percent it pronounced in October to 5 percent the week of Dec. 10, but feel that this is just a dampening, not derailment, of U.S. and global IT purchasing. Analysts said U.S. IT purchasing growth will only slow slightly from 2007 to 2008, from 5.4 percent to 4.6 percent.

They expect that the slowdown in tech purchases will be concentrated in the first three quarters of 2008, with computer and communications equipment suffering the most.

"Our conclusion is that there wouldn't be a damaging impact on IT jobs," said Bartels, adding that the slowdown will be closer to that of late 2006—brief, with a quick pickup afterward.

Part of the reason that IT professionals are likely to be immune from the effects of a slowdown in IT spending is that, if short-lived, it will be too brief to actually take IT hiring off course.

"It was too short and too shallow for CIOs to decide to make changes in head counts. If we see that again, something that is just a fraction of a percentage lower than the year before, it shouldn't be enough to affect IT jobs," Bartels said.

Read the full article at eWEEK.


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