January 17, 2012 at 10:52 AM EST
Slow Global IT Spending Growth Likely To Continue
Standard & Poor’s Ratings Services expects the current positive rating change bias in the global technology sector to continue to moderate, reflecting the ongoing slowdown in IT spending which began in the second half of last year, a weak global economy and ongoing M&A activity. Our expectation for global 2012 IT spending [...]

Standard & Poor’s Ratings Services expects the current positive rating change bias in the global technology sector to continue to moderate, reflecting the ongoing slowdown in IT spending which began in the second half of last year, a weak global economy and ongoing M&A activity.

Our expectation for global 2012 IT spending is for low- to mid-single-digit growth overall, with semiconductor firms likely to record the weakest full-year revenue performance, at flat to low-single-digit growth.

Our expected outlook for the semiconductor sector is for flat to low-single-digit growth in 2012, following similar growth rates in 2011. Sequential declines in semiconductor revenue in the second half of 2011 will carry over with resulting weakness in the first half of 2012 and a modest pickup likely in the back half of the year. We expect memory, which showed revenue declines in 2011, to remain a weak subsector within semiconductors for 2012.

Hardware growth will decelerate, with strength still to be found in storage, tablets, and Smartphones, albeit likely at lower levels. The flooding in Thailand will continue to affect the supply chain for hard-drive supplies through at least the first quarter of 2012. In turn, this will have a negative impact on PC and set-top box volumes until supplies return to normal levels later in the year.

Stable revenues from recurring maintenance and long-term service contracts supported software and services through the downturn. Until recently, contract signings were tepid, reflecting extended sales cycles and delayed corporate buying decisions. We expect services growth will likely be in the low-single digits and software growth in the mid-single digits for 2012. Still, governments are a significant market, particularly for service providers, and remain an area of concern.

Excerpted from Industry Economic And Ratings Outlook: Slow Global IT Spending Growth Is Likely To Continue Into 2012

Technorati Tags: hardware, information-technology, semiconductors, software

Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here