US Tech Market Will Grow By 6.2% In 2013 And 6.8% In 2014, As Improving Consumer Spending And Housing Offset Government Cutbacks

No one would claim that the US tech market is booming.  With Europe still mired in recession and debt problems, US economic growth looking soft, and business and consumer worries about the US government raising tax rates and cutting Federal spending, it is not surprising that businesses and governments are being cautious in their purchases of technology goods and services.  But we think the fear is overblown.  Forrester's forecast for the US tech market in 2013 and 2014 -- published today as "US Tech Market Outlook For 2013 And 2014: Better Times Ahead" -- projects a 6.2% rise in 2013 and a 6.8% growth in 2014 in US business and government purchases of computer equipment, communications equipment, software, IT consulting and systems integration services, and IT outsourcing.  Adding in slow growing telecommunications services pulls growth down to 5.7% in 2013 and 6.1% in 2014. That may not be a boom, but it is certainly not a bust.

While CIOs are cautious in their tech buying -- and in the case of the Federal government, actually cutting back -- that caution has and will show up mostly in reduced spending on computer and communications equipment (with the exception of tablets).  CIOs will be most aggressive in software, especially for SaaS apps, analytics, and mobile apps. IT outsourcing will see good growth in 2013 as the result of 2012 selection decisions, while IT consulting and systems integration will come on strong in 2014.  Business and government purchases of telecommunications services will continue to grow at a slower rate than the overall tech market.  

Construction, transportation, education, and healthcare will grow their IT budgets the fastest in 2013.  CIOs in these industries will increase their IT spending due to better business conditions (construction, transportation) or market pressures (education and healthcare). CIOs in manufacturing will turn more cautious, and those in the federal government will have to reduce their tech buying in the face of mandated budget cutbacks. 

Expanding the definition of the tech market to include consumer tech buying as well as business and government purchases, growth in consumer spending will be slightly faster in 2013, and a bit slower in 2014.

Comments

Thanks Andrew for sharing

Thanks Andrew for sharing these statistics. I guess that we'll see more spending cuts on equipment as we see wider adaptation of cloud applications among SMEs. Do you think that there will be a higher demand for data scientists in the next 2-5 years?