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Convergence of Macroeconomic Indicators and Buyer Intentions ,

The month of August saw buyer intentions for IT spending over the next 12 months converge with the macroeconomic indicators. "The US economic picture for 2007, which is slower GDP growth and much slower corporate profit growth, seems to be taking a toll on expectations and macroeconomic indicators," notes John Gantz, IDC’s Chief Research Officer. "However, the indicators haven't yet come down to the level of IDC's forecast for U.S. IT spending over the next twelve months, which would come in at 1056 on the FutureScan scale."

Driving the indicators down the most in August was lower line of business manager expectations for IT spending and next year's lower GDP and profit growth forecasts. For instance, line of business executives polled said they expected IT spending in the next 12 months to hit only 4.6%. And the July poll by Consensus Economics has U.S. corporate profit growth falling from 19.9% in 2006 to 3.2% in 2007.

"We also try to factor in the impact of the unexpected," added Gantz. "Unexpected events, like a Hurricane Katrina, a falling U.S. dollar, or a SARS in Asia, almost always seem to bring IT spending down. This reality tends to make IDC's forecasts a bit conservative."


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