Sigh. More signs of a bad start to 2008 for IT spending

Call me a pessimist, but evidence of a slowdown in IT spending in the first two quarters of 2008 is looking overwhelming. I started seeing a trickle of signs back in August, then a lot more in September and November ... and now it's a gusher!

This IDG News Service article caught my eye at Computerworld.com:

The outlook for IT spending in the new year is "unusually bad," according to ChangeWave Research LLC ... [which] ... reported that 20% of the 1,964 users who responded to the survey said that in the first quarter of 2008, they plan to spend less on IT products and services than they're spending in the current quarter -- and in some cases, nothing at all.

Some companies are giving a "yellow light" to IT projects, which could turn into a "red light" if a recession hits.

And then came IDC's November FutureScan survey of IT buyers, which "took a turn for the worse in November, as businesses recorded a significant downturn in confidence with regard to IT budget increases in the next 12 months."

Large companies (with more than 1,000 employees) are especially pessimistic, having cut their 12-month forecast for IT spending increases to just 2%. (Smaller businesses are sticking with a 5% increase.) And some large corporations (16%) say IT spending could actually decrease in the next 12 months. Financial services firms, in particular, are hit hard by the credit crunch.

IDC's cautious conclusion:

The buyer survey is in line with a wide range of other surveys and indicators that are now consistently pointing toward some level of IT spending deceleration in the coming months.

In case you've been asleep, IDC describes the macro-economic reasons for all of this:

This decline reflects, of course, the recent macroeconomic noise that has provoked a general downturn in business confidence. Large firms in the financial services industry have recorded billions of dollars in losses related to the subprime mortgage and credit markets crisis, and an apparent dip in consumer confidence has affected retail sales in October and November. Energy costs remain high, with the price of oil approaching inflation-adjusted record highs and threatening to break the $100-per-barrel milestone.

Whether this IT spending slump comes to pass depends on a wide variety of macro-economic factors, including corporate profits. Large IT users may already have contingency plans to trim the growth in IT spending. In the most bearish scenario of an actual recession, that could turn into actual decreases in IT spending.

By the way, IDC notes that "there's generally a two-quarter lag between the economy collapsing and IT spending following."