Tech spending in 2007: the cycle turns?

A rebound in spending on IT by corporations and governments, while not back to boom-time levels, has provided a solid foundation for the technology industry over the past three years. Will 2007 be the year things slow down again?

Here are some straws in the wind from recent global forecasts:

2006 2007
Forrester Research (IT spending) 8 pc 6 pc
Forrester (External IT purchases) 8 pc 5 pc
IDC (IT spending) n/a 6.3 pc
Goldman Sachs (IT spending) 6-7 pc “probably down"
Sanford C Bernstein (CFO survey) 5.2 pc 4.7 pc
Gartner (spending by big companies) n/a 2.8 pc

The danger, as IDC points out, is that falling profit growth in the US, along with a harder economic landing, could make current expectations look too optimistic. That would not mean a return to the dark days of 2001 and 2002, but it would certainly be a far less hospitable environment for technology investors - particularly given the current high valuations on tech stocks. (Thanks to Tech-Blogger on Financial Times - Mr. Richard Waters)