Forrester Research expects North American corporate IT spending to recover from its downward slide this year, with IT executives spending 2.3 per cent more on computer hardware, software and services than the past year.

According to Forrester's semi-annual “Business Technographics North America Benchmark Study”, spending in services and retail will grow by around 7 per cent this year, the company said.

Forrester's survey is based on interviews with 1,001 technology executives at North American companies with annual revenues of $500 million or more.

Rise up It paints a cautiously optimistic outlook on IT spending during the second half of the year, with 19 per cent of companies surveyed intening to raise IT budgets by the end of 2002. On the down side, 12 per cent said they plan to cut budgets.

Of those increasing their IT budgets, 37 per cent plan to raise them by more than 10 per cent, Forrester said. 55 per cent of respondents described their executives as willing to "spend what it takes" on IT, as compared to 36 per cent who expressed the same sentiment at the beginning of the year.

However, companies with annual revenue below $1billion will not be a growth market for IT vendors this year, the report warns. Such companies don't plan on IT spending this year.

The most profitable products in the services market will be “specialized, smaller-scale offerings”, while data dissemination products such as portals and business intelligence software will carry the market, Forrester said.

Last month, IDC forecast total worldwide IT spending of $981 billion in 2002, an overall increase of 3.7 per cent over 2001.