INVESTMENT FREEZE LIKELY FROM MID-1999.

Summary: Computer companies are likely to face a freeze on investments from mid-1999, with customers busy testing software for the turn of the century, according to a study drawn up by IT Asset Management.

The report suggests that concerns over the turn of the century and the now notorious millennium bug may have resulted in an acceleration in spending between 1997 and 1999, but that investment is likely to tail of later in the year, as companies test installations to ensure that systems and applications will continue working on January 1 2000 and beyond. Drawing on a survey conducted by the American Gartner Group, IT Asset Management therefore predicts a 6 to 9 month freeze on investments. The upward trend in investment until mid-1999 should neutralise the impact of a global economic downturn, but against a background of economic slowdown and recession, sluggish orders over the period June 99-March 2000 are likely to have a negative impact on the profits of companies in the...