International Data Corporation (IDC) is projecting the coronavirus outbreak will have a significant impact on IT spending during 2020.

According to the report, the IDC sees hardware spending taking the biggest hit during the first half of the year, with software and services also being impacted. Pessimistically, IT spending growth could drop to as low as 1%, as opposed to the more than 4% growth originally projected.

“The situation is extremely fluid,” said Stephen Minton, vice president in IDC’s Customer Insights & Analysis group. “Our monthly data and surveys are clearly pointing in one direction, but it’s still early to understand the full impact of the coronavirus crisis across all sectors of the economy. We are using scenario models to illustrate that forecasts have a wider range than usual, and the downside risks in those models seem to be increasing every day. But the duration of the crisis remains a big unknown and will go a long way in determining overall market growth for the year as a whole.”

“The pessimistic scenario is not a worst-case scenario,” added Minton. “Things are moving so quickly that we need to constantly recalibrate our assumptions and expectations, but the pessimistic scenario reflects an IT market in which weaker economic growth translates into weaker business and consumer spending across all technologies over the next few quarters. Things could get worse, but hopefully not.”