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November 21, 2009
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March 9, 2009
 
 
arrow Will IT Spending Rebound?
 
 
arrow Hot Tickets From the Alliance
 
 
Tobin Smith

Cautious Optimism

It's been a while since we've been able to bring you any good news in the Hot Sheet, but out latest corporate IT purchasing survey does show a leveling off in the rate of spending decline and a bit of hope for the latter part of the year. However, you must be careful when interpreting these results, as they are showing up in an incredibly negative environment. That said, check out today's findings and stay tuned to our research to see if this trend holds.


Toby

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arrow Will IT Spending Rebound?

Survey shows a fiercely negative environment for first half of 2009, but a glint of hope for the second half

By Paul Carton and Jean Crumrine

The collapse in U.S. business spending we reported last quarter has extended into this year, although ChangeWave's latest corporate IT purchasing survey does show a slight leveling off in the rate of decline for the first half of 2009, and a glint of hope for the second half of the year.

Forty-one percent of respondents said their company's IT spending will decrease, or there will be no spending at all, for the second quarter, which is an extraordinarily high number. However, it is four points improved from our November survey results.

Only 10% said their IT spending will increase -- unchanged from previously.

Keep reading to learn what positive signs we picked up for the second half of the year.

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arrow Hot Tickets From the Alliance

Each week Alliance members submit "Hot Tickets" as a way of presenting new observations and ideas on investable opportunities to ChangeWave.

* Note: These Hot Tickets are for informational purposes only. They do not represent recommendations from ChangeWave.

1) Always Busy at Verizon Stores

DWO95337 writes: "I am a Verizon (VZ) user and every time I go to one of their stores, they are always very busy. I always see at least 30-50 people in the store. Times might be bad, but people are not giving up their wireless phones."

(2) More 'Green' Food Popping Up

YSU58927 writes: "Despite stretched budgets, people appear sensitive to responsible, healthy and ecological foods. The recent earnings of Whole Foods Market (WFMI) are a testimony to this.

"However, as the stretching continues, it is conceivable consumers will look toward cheaper alternatives. As an example, I see the Wild Harvest brand, which is the 'green' line of products from Supervalu (SVU), popping up everywhere in my local supermarket. Not a week goes by that I don't see a new item added to the Wild Harvest line. This is a trend that is likely to continue to grow."

(3) Escalating Insurance Premiums

DMP73803 writes: "Back in December 2008, I applied for term life insurance with two different companies. I was put through the ringer, taking until the end of February to get approved. The big catch was that they both kept requiring more and more information.

"Even though I'm in reasonably good health, the best prices that I was first quoted quickly disappeared. By the time they got through with me, the premiums had doubled. My doctor told me he's seeing a lot of this lately. So it looks like the insurance companies are in dire shape and are trying to recoup from their mistakes by taking it out on the consumer. This further complicates their ability to make money."

(4) RV Lot Rentals

LAK09820 writes, "At our small resort, we're seeing a good -- if uneven -- flow of business. While people may not be buying RVs, they're definitely using them because our RV lot rentals are up.

"At the same time, our restaurant and bar business revenues are lower than last year, but remain stable. We also recently we dropped our lot prices 25%, which sparked renewed interest and contracts. As a result, we are seeing pricing constraints and costs continuing to rise, but even in these tight times we've modestly expanded our rental operation. And longer term we're planning future lot expansion and enhancement of our resort amenities to be ready for better times ahead."