Study Predicts 3% Rise In Canadian IT Spending For 2008

September 19, 2008 4:47 p.m. EST

Toronto, Ontario (AHN) - Canadian companies are expected to slow down in their information technology spending for the rest of 2008. This will result to a 3 percent rise in IT spending, according to a forecast by Forrest Research released Friday.

The research firm explained the lesser rate of IT investment to the booming western energy sector and the suffering eastern manufacturing sector.

Forrest Research predicts total IT spending to peak at $50 billion this year. Hardware and peripheral equipment purchase will likely decline by 4 percent compared to 2007 levels, but this will be partly offset by a modest growth in purchase of software, services and communication equipment.

The main driver of growth in the IT sector will still be business and government investment in new wireless technology and Internet networking systems which will go up by 6 percent in 2008, Forrest Research said.

Meanwhile, in the light of the global financial credit crunch worsened by the Lehman Brothers bankruptcy, sale of Merrill Lynch, AIG bailout and Morgan Stanley placed on the brink of financial woes, Prime Minister Stephen Harper called on Canadians to keep on spending to boost the local economy.

At the same time, Harper assured Canadians the country's financial system is sound and would hardly be affected by Wall Street's woes. "The balance sheets of the Canadian financial system are very strong. The core banks and insurance companies in this country are for the most part in very good financial shape," the prime minister told media.