Worldwide PC shipments will not grow as quickly as expected due to a significant decline in government and education spending, and despite signs of life among enterprise PC customers, according to
research company IDC.

Last December, IDC predicted that PC shipments would grow 8.3 per cent in 2003. The forecast for growth in worldwide shipments this year now stands at 6.9 per cent, reflecting a sharp fall in public sector IT spending, said Roger Kay, director of client computing at IDC.

"The public sector dropped off rather dramatically, because the tax receipts were lower in 2002. Budgets are severely constrained, and the last flush of public spending was the third quarter of 2002," he said. The uncertainty around a possible war in Iraq and the cautious outlook in other parts of the world are helping to stifle growth, he said.

Corporate spending, at least among enterprises, appears to be picking up, Kay said. The long-awaited PC refresh cycle is starting to gain steam as companies examine their aging infrastructures and realize they can pick up much more powerful systems for a relatively cheap price, he said.

But improved enterprise spending has not been accompanied by increased spending among small and medium-size businesses, and hasn't been enough to offset the decline in public sector spending, he said.

Shipment value is expected to decline 1.8 per cent in 2003, reflecting the further erosion of average selling prices among PC vendors, Kay said.

Commercial growth is expected to be weaker in the US, compared to the rest of the world. US corporate PC spending is forecast to grow 2.9 per cent, while worldwide commercial growth comes in at 6.5 per cent, IDC said.