IDC Projects ‘Mild' Recession, Then ‘Soft Landing’ in 2023: Analyst
IDC has “realistic” expectations of a “consumer-led recession” affecting global economies in the second half of this year and into 2023, Stephen Minton, vice president-customer insights and analysis, told an IDC webinar Thursday on global recessionary scenarios and their impact…
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on information tech spending. “We have reached a point where consumer spending is under a fair amount of pressure for the first six months of this year,” said Minton. IDC’s forecasts are for a “mild” recession, compared with those of the 2008 financial crisis and the dot.com fallout of the early 2000s, followed by a “soft landing” in 2023, he said. “We did have a period where consumers were pretty flush with disposable income” through COVID government stimulus packages throughout the world, he said: “That meant that consumers felt pretty bullish about a year ago.” Consumers to a certain extent were “willing and able to pay a little bit more for certain things, including technology, as prices began to rise,” said Minton. “We’ve kind of gotten to the point now where consumers are no longer willing, or in many cases able, to keep on increasing how much they’re spending as prices continue to rise.” The risk of recession “has clearly increased,” said Minton, but “there are no signs of businesses and service providers yet taking a really sharp knife” to their short-term IT budget planning. “The consumer side is much more vulnerable,” he said. “It’s a different kind of story. We already have pretty solid evidence of a slowdown in shipments of PCs and other consumer devices in the first half of this year, which is likely to get maybe even worse if we continue to head into a more negative economic climate in the next six to 12 months.”