The battered high-tech industry, after being hit by the Internet bubble collapse, is showing signs of a modest revival, according to recent surveys.
But analysts say the sector is unlikely to return to the torrid pace of growth of prior years.
International Data Corp (IDC) said in a report this week that the global IT market "has hit bottom and is poised for recovery in 2002," helped by a rebound in the US economy.
But IDC warned that IT spending growth "will remain muted by historical standards before staging a full recovery in 2003."
According to IDC figures, worldwide IT spending growth, which was flat last year, is projected to rise to 4.7 percent this year and ramp up to 9.6 percent next year.
"The ingredients for a technology rebound are falling into place," said IDC analyst Kevin White. "Recent data releases point to a faster-than-expected recovery in the United States economy. As business conditions firm we expect to see companies relaunch IT projects that were deferred in 2001."
A survey of North American corporate chief information officers by CIO Magazine came to a similar conclusion.
The survey found companies are expecting IT budgets will grow by 6 percent over the next 12 months after a decrease by an average of 1.4 percent over the previous year -- the first time in the poll's history showing negative growth.
"Chief information officers are claiming 2002 is shaping up as a transition year. More than one-quarter of overall respondents -- and even a higher percentage of larger firms, in fact -- now report they have moved their spending increases into 2003," said Gary Beach, publisher of CIO.
Commenting on the survey, Ed Yardeni at Prudential Securities said it appears to show "technology spending has bottomed and there is a recovery, but so far it remains lackluster as companies continue to focus on restructuring their businesses and balance sheets rather than expanding as aggressively as they did in the late 1990s."
Yardeni added that "historically that the same thing that drives IT spending is the same thing that drives capital spending, and that is profits."
He noted that while profits remain elusive, they will recover slowly but surely.
"I believe we are starting to see a moderate to modest recovery that will gain momentum as we enter next year," he said.
On a regional bases, IDC predicts a rise in IT spending in the US of 3.7 percent this year, reversing the 3.5 percent contraction last year, with growth forecast to accelerate to 8.8 percent next year.
Outside North America, IDC predicts that IT markets will show modest improvement this year, with Western Europe IT spending up 6.2 percent and the Asia/Pacific region growing 4.7 percent.
In Japan, a separate survey recently showed companies expecting IT spending likely to grow 3.8 percent in the fiscal year to March 2003.
More evidence of the recovery came Thursday in a report showing worldwide sales of semiconductors in March rose 7.2 percent from the prior month to US$10.75 billion.
The Semiconductor Industry Association said also that sales in the first quarter rose 5.6 percent to US$32.25 billion.
The quarterly growth "indicates that inventory build-up has been worked through and product demand is now beginning to pick up," the association said.
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