SARS Hits IT Spending

While the World Health Organization declared on July 5 that the epidemic of severe acute respiratory syndrome, or SARS, had been contained, the world economy will continue to feel the effects of the deadly disease for some time.

SARS, which infected 8,436 people in 30 countries and killed 812 since the first case was reported in China last November, will cost the global economy $30 billion, according to a widely cited estimate by Morgan Stanley’s chief economist. IT analysts report that lowered technology investments will, like the disease itself, hit Asian countries such as China and Taiwan the hardest.

Aberdeen Group says both demand for technology goods and the supply of silicon chips and other computer components will drop. That will cost China an estimated $1.7 billion in IT spending as global technology expenditures will drop by $2.2 billion, Aberdeen predicts. IDC (a sister company to CIO’s publisher) projects China will lose about $1 billion in information technology spending. That translates to an IT spending growth rate of 6.1 percent instead of 7.6 percent for 2003.