FRAMINGHAM, MA - Worldwide IT spending reached $965 billion in 2004 and will increase at a compound annual growth rate of 6% from 2004 to 2008, says a new research report.

Recovery is expected in hardware sales worldwide, with revenues forecast to reach $465 billion by 2008, IDC said today. The research firm predicts robust spending from consumer, communications and media, and government.

Banking, discrete manufacturing and government are the largest IT buyers.

U.S. IT spending will reach $416 billion in 2005, up 5.8% from 2004.

In a press release, IDC said, "These results indicate a positive outlook for the U.S. and worldwide IT market, particularly after 2005. With an improving business environment and recent GDP gains, companies are loosening their restraints for information technology investments."

The firm also forecast U.S. sales of PCs will reach $49 billion in 2005.