Tech spending slows, thanks to Congress

Tech spending in the U.S. will increase by a smaller amount this year than earlier predicted, mostly because of moves in Congress, says Forrester Research.

The research firm now projects that tech spending will increase by 3.9% this year; that's well below its earlier prediction of 5.7%.

The federal budget sequester, the government shutdown and the threat of default have had "negative impacts on the economy" and "direct negative impacts on federal tech buying," as well as indirect impacts on "CIOs who simply became cautious," said Andrew Bartels, a Forrester analyst.

For instance, Bartels said that CIOs who might have bought servers to meet new demand for computing power are instead moving peak loads and special projects to infrastructure-as-a-service providers.

The White House estimates that the 16-day government shutdown reduced the growth rate of GDP in this quarter by 0.2% to 0.6%.

Next year, Forrester projects that U.S. business and government purchases of IT goods and services will rise by 5.3%, thanks to a revived housing market, "modest improvement" in employment and consumer spending, and improved exports.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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