The PC industry is entering a global recession, according to analysts' reports of fourth-quarter 2000 PC sales.

"It is clear that technology has entered a global recession," said Ashok Kumar, an industry analyst at Piper Jaffray.

Calling 2000 "the year that never was" for PC sales, Kumar blames the current technology recession on a fourth-quarter 2000 saturation of PCs in the consumer and commercial markets in the United States.

Recovery signs "Given the inventory position, we expect PC sales to be the leading indicator of IT spending recovery," Kumar said.

IDC confirmed that PC saturation in the United States caused sales to decline 1.7 per cent year-on-year.

"The country's installed PC base has been expanding at a much slower rate than previous quarters," the report said. The IDC report continued: "A general malaise in retail sales dampened fourth-quarter PC sales in the consumer market. The commercial market, while having shown some signs of a comeback, was also sluggish."

Global growth The worldwide desktop-PC market grew 5 per cent in 2000, but unit shipments of desktop PCs fell in the United States by 4.3 per cent, the IDC report added.

Looking forward, IDC expects PC sales in the United States to remain slow. It predicted: "The market is responding to a deteriorating economic environment as well as increasing signs of saturation in both consumer and commercial markets."

Kumar agreed, saying: "We do not believe there will be a sustainable cyclical recovery in PC sales until the second half of 2002. The second half of 2001 will not be a period of economic recovery, but a full-fledged recession, which should result in negative unit growth for the PC market in 2001 - a first in its history."