Report: companies expect fast IT spending growth

Company executives are feeling bullish about information technology spending, according to new research from analyst firm IDC--which disagrees with its own findings.

An IDC survey this month of at least 400 business and technology executives in the United States found the leaders expecting IT spending growth of 12.9 percent over the next 12 months. But John Gantz, IDC's chief research officer, said he doubted such spending will materialize. "We don't believe that," Gantz said during a presentation Tuesday. "But that's what they told us."

IDC is forecasting U.S. IT spending growth of 5 percent for this year, to $376.4 billion. The research firm expects U.S. IT spending growth next year of 6 percent. Worldwide, IDC predicts IT spending this year will rise 5.2 percent, to $915.1 billion. It will climb another 6.3 percent next year, according to the research firm.

Gantz on Tuesday outlined the major assumptions behind IDC's forecasts for the rest of 2004 and 2005. They include stocks stuck in the doldrums, U.S. unemployment above 5 percent, mild inflation and oil prices that remain high. Gantz said the oil situation is one of a capacity crunch, with notable demand from China and from sales of sport-utility vehicles in the United States. "We're in a long-term period of higher oil prices," he said.

Gantz said a rule of thumb is that for every $5 increase per barrel in oil, the world's economic output decreases by .1 percent. IDC presented a chart showing that crude oil had cost less than $35 per barrel in April but had risen to more than $43 per barrel at the end of July.

IDC's finding that company executives are optimistic about IT spending echoed the results of a study released Tuesday by technology services company Accenture. Accenture said most business and IT executives in the United States disease outbreak, Gantz suggested. He said there's a "high probability of some low-probability event taking place."