The Economy Still Faces Too Much Uncertainty

 
 
By Don Reisinger  |  Posted 2010-01-14 Email Print this article Print
 
 
 
 
 
 
 


5. The beginning of the year is tough

I do believe that 2010 will be a better year for the tech sector, but we can't expect it to improve just yet. Historically, the early months of the year, especially January, are tough for tech companies. Consumer and enterprise spending is usually done in December, causing January to lag behind. Expect better results in a month or two.

6. The global recovery is fragile

There is tentative optimism around the world about the next six to 12 months. Some economic indicators suggest that there is a recovery under way, but given the state of financial institutions, a crippled automotive industry and a weakened job market, it is possible that the economy won't recover as quickly or efficiently as some have hoped. This will be true for the tech sector as much as for any other industry.

7. Companies are unsure

Companies of every size are wondering which way to turn in 2010. Many got burned last year, taking big hits to their bottom lines. Although they might be confident that things will get better by the end of 2010, for now, many companies are wondering what the next few months will hold. That will likely mean that they will keep their spending in check for at least another month or two.

8. Where are the jobs?

With a high unemployment rate wreaking havoc on the economy and companies still trying to determine if it's time to start spending again, there are few jobs available. Once again, the government believes that the job market will thaw later in the year. However, until companies start spending, folks get back to work and disposal income increases, we can't expect a major upswing of growth in the tech sector.

9. There's more than spending

Unfortunately, increased spending alone doesn't indicate an economic recovery. While increased spending is an important element in a rebounding economy, there's more to it. In order to overcome a recession, the effects of a resurgence need to be felt by all stakeholders, including consumers, employees and prospective employees. Over the next few months, it's unlikely that all those stakeholders will reap the rewards of Forrester's predictions, should they come true.

10. Worries about a recessionary 'double-dip'

In Forrester's report, it examined the possibility of a "double-dip" recession. According to the research company, there is a 15 percent chance that the economy will grow and then fall back into a new recession. If that happens, Forrester's predictions would (obviously) change for the worst. Granted, the chances of the double-dip recession occurring are slim, but it underscores the state of the tech sector today. Yes, things will likely be better in 2010. Yes, the economy will likely start churning once again. But to say there will be a rapid return to a vibrant economy as we move deeper into 2010 is likely incorrect.

Overcoming a recession takes time. The future looks modestly brighter, but a new resurgence in the tech industry won't come overnight. We can't forget that.



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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