CAMBRIDGE, Mass.--(BUSINESS WIRE)--March 21, 2007--The
Forrester/ITAA Tech Sector Index -- which measures the health of the
US technology industry -- reached its highest level in five and a half
years in Q4 2006, rising two points to 128.8. The latest quarterly
index from Forrester Research Inc. (Nasdaq: FORR) and the Information
Technology Association of America (ITAA) indicates continued slow but
steady gains for the US tech sector in 2007.
"The financial performance of US technology vendors last quarter
helped push the Index higher," said Forrester Analyst G. Oliver Young.
"Stock prices were up across the board at the end of 2006, and net
income for the 22 major US tech vendors that Forrester monitors
reached $13.2 billion, the highest quarterly level since we began
tracking. But foreign sales -- not domestic demand -- is driving
vendor revenues and profits."
"The IT industry is thriving on a global stage and driving value
at home," said ITAA President and CEO Phil Bond. "Every high school
graduate should know that IT employment is at its strongest in four
years and spending forecasts signal a continued climb for demand in
the US market."
Q4 2006 Results
The Index is based on 11 indices measuring IT demand, IT supply,
and the financial strength of US-based vendors. All of the indices are
weighted evenly in the overall Index score, which uses a 2002
quarterly average of 100 as the baseline. In Q4 2006, seven of the 11
indices were up. The two point increase in the Index compares with a
3.7-point gain in Q3. Highlights include:
-- As indicated above, vendor financial performance was the
primary driver lifting the Index. The stock price component of
the Index jumped 16.2 points, reflecting the broad rise in the
stock market at the end of last year. The vendor profit
component of the Index grew 10.9 points for the quarter.
-- US demand for tech products and services grew 2.5 points,
based in part on continued optimism of spending forecasts by
CIOs surveyed by Forrester.
-- IT industry employment edged up slightly, gaining 11,700 tech
sector jobs. Employment now stands at the highest level since
the close of 2002.
-- After falling 9.4 points in Q3, venture capital investment
plunged an additional 20.8 points in Q4 -- a
quarter-on-quarter drop of $711 million.
The report "Forrester/ITAA US Tech Sector Index: Q4 2006" is
currently available to Forrester RoleView(TM) clients and can also be
purchased directly at:
0,7211,41899,00.html (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.)
About Forrester Research
Forrester Research, Inc. (Nasdaq: FORR) is an independent
technology and market research company that provides pragmatic and
forward-thinking advice to global leaders in business and technology.
For more than 23 years, Forrester has been making leaders successful
every day through its proprietary research, consulting, events, and
peer-to-peer executive programs.
The Information Technology Association of America (ITAA) provides
global public policy, business networking, and national leadership to
promote the continued rapid growth of the IT industry. ITAA consists
of more than 325 corporate members throughout the US, and a global
network of 70 countries' IT associations. The Association plays the
leading role in issues of IT industry concern including information
security, taxes and finance policy, digital intellectual property
protection, telecommunications competition, workforce and education,
immigration, online privacy and consumer protection, government IT
procurement, human resources and eCommerce policy. ITAA members range
from the smallest IT startups to industry leaders in the Internet,
software, IT services, ASP, digital content, systems integration,
telecommunications, and enterprise solution fields. For more
information, visit www.itaa.org.
(C) 2007, Forrester Research, Inc. All rights reserved. Forrester
is a trademark of Forrester Research, Inc.
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SOURCE: Forrester Research, Inc.