Veronis, Suhler Forecasts Spending on Business Information to Reach $34.9 Billion by 1996

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According to the sixth annual Communication Industry Forecast released by investment bankers Veronis, Suhler & Associates, Inc., spending on business information services will increase at a 7.6 percent compound annual rate, compared with 9.1 percent over the previous year. Spending will reach $34.9 billion by 1996, up from $24.2 billion in 1991, according to the report.

"A second generation of technological developments, focusing on software, will stimulate growth over the next ten years, with some of the growth expected to fall within the Forecast period," said John S. Suhler, president of the firm. "Data collection, the integration of newly acquired data into existing databases, and new software will expand the uses of existing data and possibly lead to the development of new products.

"Growth over the period will not match that of the five years primarily because the technological developments of the 1980s, which led to improvements in the ability to process information and transmit it electronically, have run their course," Mr. Suhler added.

In the near term, the economy will have an adverse effect on business information spending, but stronger growth will return by 1993 as the recession bottoms out. Also, the completion of corporate restructuring will revive demand for information services related to long-term growth, such as scientific and technical information, while reducing the demand for services related to cost control, such as payroll and human resource services.

As the economic outlook improves, spending on marketing information and economic/financial data will increase. Marketing information will rise from $8.2 billion in 1991 to $11.5 billion by 1996, having grown at a 7.0 percent compound annual rate, and garnering 33.0 percent of total business information spending. This growth is 1.4 points lower than the 8.4 percent growth of the previous period. Spending on economic/financial data will grow at a 9.7 percent compound annual rate, compared with 10.4 percent from $4.5 billion in 1991. The subsegment will account for 20.3 percent of total spending on business information.

Credit information will be the slowest-growing category over the period as recession-wary businesses and consumers continue to reduce their debt burdens, thereby diminishing demand for credit and credit information. …