2008 IT investment projections have been revised downwards with IT spending in Europe, the US, Canada and Latin America expected to grow 5% to 7 % next year.

Research group Forrester cut its 2008 projections from earlier estimates of around 8% growth in US spending to 4.8%, according to the report, US. And Global IT Spending And Purchases In 2008

The areas hardest hit by the downturn will be computer and communications equipment and IT services, the latter being typically the first to get hit, said principal analyst Andrew Bartels. "The first things CIOs cut are consultants and contractors," he said.

According to Bartels, the slowdown in 2008 will happen mainly from the first quarter to the third quarter, with growth in the fourth quarter of the year that will continue into 2009.

In its year-end report, Forrester defines IT investment as spending in computer equipment, communications equipment and software. It adds spending in two other segments -- IT services and outsourcing and IT staff salary and benefits -- for its definition of IT spending.

CIOs should plan conservative budgets, Bartels said. However, there are technologies on the horizon that CIOs should prepare to implement in 2009, so they have the difficult task in 2008 of juggling conservatism and building for the future, Bartels said.

Those emerging technologies include unified communications infrastructure and dynamic business applications.

"It's important CIOs ... don't get so cautious they're not ready for the next wave," Bartels said.