U.S. Economic Decline to Affect IT Expenditure in Asia Pacific: IDC

Taipei, April 16, 2008 (CENS)--In a review of the most recent economic indicators, current information technology (IT) forecasts, and the economic linkage of Asia/Pacific including Japan (APJ) region and U.S. economies, IDC has developed two scenarios of worsening U.S. economic outlook for lead factors associated with IT expenditure.

IDC, the premier global provider of market intelligence, advisory services for various industries, pointed out that in the first scenario, IDC's research forecasts a moderate 1.7% and 0.9% erosion of its current forecasted APJ IT market growth for 2008 and 2009, respectfully, should the U.S. conditions worsen. That means US$4.8 billion and US$7.5 billion less market potential in 2008 and 2009, respectively, the market research firm said.

Gary Koch, associate vice president of IDC's Asia/Pacific IT Spending Research, pointed out that even with a slightly less optimistic outlook depicted in IDC's preliminary IT market forecasts, a further slide in the U.S. outlook will have noted impact on the APJ IT markets. "Economies with greater participation in fulfilling U.S. consumption will feel the brunt of a continued downturn more than others in the region. However, industrial production growth and favorable levels of business investment and public sector spending in several parts of the region will soften this downward pressure on IT spending."

IDC pointed out that the second and more negative scenario for the U.S. economy would result in a stronger influence on the business outlook in the APJ economies and would result in as much as US$7.9 billion and US$13.6 billion slashed from IDC's current APJ IT market forecast in 2008 and 2009. This would push the already very moderate growth rates of IT markets in south Korea and Taiwan into negative territory for 2008.

While the decline in absolute dollars within IDC's projections are substantial in markets like mainland China and India, the size of these markets diminishes the resulting impact on their growth rates. Therefore, the APJ regional IT market would still boast moderate growth in both 2008 and 2009, 3.1% and 5.5%, respectively, IDC said.