In a research note Wednesday, Morgan Stanley (NYSE:MS) said the firm's third-quarter CIO survey suggests a further weakening of IT spending.
"As volatile macro conditions persist, we have accelerated the publication of the high level takeaways from our most recent CIO survey, fielded between August 6 and September 6," wrote the firm.
The note also stated that CY22 IT budget growth expectations are moderating an additional 100 bps to 3.0%, while the first look at 2023 budgets suggests "relatively stable growth at 2.8%, but up-to-down revision expectations falling below 1X suggests that may not hold."
"3Q's revisions leave spending expectations for both '22/'23 below the 10-year pre-Covid average of 4.1%. The 1-year up-to-down ratio, which measures the ratio of CIOs expecting to revise budgets higher:lower, declined to 0.4X (from 1.1X prior) , indicating more CIOs expect to revise their budgets lower on a go forward basis in 2022," the note added.
In addition, Morgan Stanley feels the combination of declining current growth expectations and softening up-to-down ratio suggests that IT budget growth "could remain challenged near-term," while on a sector view, "CIOs expect spending growth to decelerate across the board into 2023."
By Sam Boughedda