Sequester to slow IT procurement, turnover

Sequester to slow IT procurement, turnover

By Editorial Staff, Resource Recycling

The Federal government is the world's largest purchaser of IT equipment — and consequently, one of the largest generators of e-scrap. With the sequester deadline passed, ripple effects from the federal cutbacks will soon be felt throughout the electronics recycling industry.

Over 10,000 computers are disposed of by the U.S. government every week, according to a 2012 report from the Government Accountability Office, primarily due to asset replacement. But with procurement budgets among the first victims of the across-the-board sequester cuts, many government offices will be holding on to equipment longer.

The direct impact of sequestration is likely to be a reduction of 5-7 percent of the approximate $80 billion in annual IT spending by the federal government. The volume of computers sent for recycling by federal government offices account for 2.8 percent of the estimated 18 million computers recycled annually in the U.S.

IT spending includes hardware, software and services spending, and reductions in hardware purchases are expected to be significantly higher, since they can be more easily deferred, according to Forbes.

The Federal government accounts for approximately 9 percent of the U.S. tech market, with state and local governments also contributing heavily to the tech economy. Lower IT spending by governments at all levels is expected to send ripple effects through the rest of the tech industry. Market research firm Forrester Research expects year-over-year growth in the U.S. tech sector to be flat. IDC expects IT spending (including software and services) to grow just 6 percent in 2013.

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