For the IT industry, 2002 is shaping up as the worst year ever. IDC is concluding that the worldwide IT industry in 2002 suffered its largest decline ever, with a growth rate of negative 2.3% in contrast to average annual growth of 12% over the past 20 years. Although IDC expects the growth rate in 2003 to resume at more than 5%, it cautions against higher expectations. Constraints to higher growth include continued weak demand in the software sector, sharp price competition in hardware sector, and a continued trend toward smaller projects in the services sector.

According to IDC's Stephen Minton, "Although the industry as a whole won’t return to the kind of growth enjoyed before the downturn, there will be a number of bright spots over the next several years.” For the U.S. market, spending growth in 2003 will be led by renewed demand for servers, security, and network equipment, with growth in storage and software expected starting in 2005. IDC's press release has more details, including projections for international markets.