A leading market research firm today spelled out the ugly truth that plenty of PC and semiconductor companies already knew: Business spending isn't picking up, and now there's another worry to add to the mix. Consumers, who drive about a third of PC shipments, also look to be spending more cautiously in the back-to-school season and leading up to the holiday season.

The upshot: The much-delayed pickup in demand just got postponed again, possibly to the middle of next year, according to analysts at IDC.

Despite the glum forecasts, most PC stocks managed to rise for the day after a rocky start.

Hewlett-Packard

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finished up 28 cents, or 2.1%, to $13.78, while

Dell

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was up 38 cents, or 1.5%, to $26.48.

IBM

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climbed $1.63, or 2.2%, to $74.83.

In an updated forecast, IDC said it now expects sales of personal computers to grow by a meager 1.1% in 2002, given the tougher environment.

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"We are basically flat year on year, against really easy comparisons," says Roger Kay, director of client computing at IDC. He said the group had compiled its forecast by applying "normal seasonal patterns to very depressed data."

As recently as June, IDC had issued a more optimistic forecast for 4.7% growth. But the momentum that was apparent in the second quarter has now all but disappeared, analysts said. Demand has been soft among big businesses and consumers, though small businesses and the public sector have shown somewhat more strength.

Meanwhile, survey data released by Goldman Sachs today suggests investors may be disappointed again by overall corporate spending in 2003. Goldman says IT spending is on track to grow 2% to 3% in the U.S. next year, well below current Street estimates for 9% revenue growth.

Still, IDC analysts expect PC growth in 2003 to accelerate from its current levels, as companies replace some of the computers that have grown outdated and slow since the last replacement cycle in 1999. IDC predicts 2003 shipments will grow by 8.4% over this year.

As for the near term, the revised forecast from IDC fits with the more sober outlooks recently issued by major computer and semiconductor vendors. Two weeks ago H-P, which commands the biggest share of the PC market, issued a forecast that fell below the goal it had set out in June for the second half of 2002. The company expects sequential sales to grow a modest 5% in the current quarter.

Also in late August, the CEO of

Intel

said it wasn't clear whether the usual fourth-quarter, holiday spending surge would kick in this year, given the uncertain economy.

The new IDC numbers are roughly in line with those issued in August by another market research group, Gartner Dataquest. Gartner said last month that it expects 2002 PC sales to fall in a range between 4% growth and negative 2%.

But in 2003, sales should grow between 5% and 12%, predicts Gartner principal George Shiffler, with the exact amount depending on the state of economic recovery and the timing of the corporate PC replacement cycle.

"There's still some downside risk that we could not see a definite turn-up in the U.S. economy until the middle of next year," says Shiffler. "Our general expectation is that the U.S. economy will show definite signs of recovery by the beginning of next year and various parts of the global economy will fall into line after that. But if the timing gets pushed out, that will have a depressing effect on PCs."

The weak performance expected this year will follow an abysmal year in 2001, which was the worst ever for the PC industry. Worldwide unit shipments fell 4%.

That represents a sharp turnaround from robust industry growth of 24% and 16%, respectively, in 1999 and 2000.