Analyst firm IDC expects US companies to increase their IT spending by 4 per cent in 2004, the firm said yesterday.

The slight rebound in IT spending will be driven by continued economic growth, and the need for organizations to upgrade outdated equipment.
IDC's "IT & Telecom Spending Outlook 2004" report, which is based on an October survey of 557 IT executives, found that tech-spending cutbacks over the past few years have resulted in underfunding for PC and server upgrades, which could lead to a replacement cycle beginning next year, said IDC analyst Stephen Minton.

Despite a 7.2 per cent rise in the US gross domestic product for the third quarter, IDC is still taking a "cautious" stance on 2004 IT spending. Under a predictive modelling technique used by the firm, IT spending in the US could rise by as much as 8 per cent next year if GDP and corporate profits continue to grow at strong levels. But if the economy slides backwards, IT spending could inch up by just 1 per cent, IDC said.