In an analysis of the Canadian IT market for its U.S. and international clients, Forrester Research is projecting a moderate increase in Canadian IT spending of four percent in 2006, continuing two years of slow growth.

Forrester analyst Andrew Bartels said when compared to the U.S., Canada’s growth rate is slow but has been more stable. During the economic downturn, spending did not drop as far as it did in the U.S., so in Canada the rebound has been shallower.

By category, Forrester is projecting eight percent growth in spending on communications equipment and a four percent increase in spending on computer equipment and software.

The top priority for Canadian companies in 2006 is consolidating IT infrastructure, cited as critical by 23 percent and somewhat important by 38 percent, followed by compliance, primarily Sarbanes-Oxley.

Bartels said Canada is a tale of two regions: the West and the East. In the East, dominated by the manufacturing sector, business has been slow with the high Canadian dollar hampering exports. In the West, high commodity prices have the resource sector booming.

More than half of Canadian businesses think 2006 will be a somewhat good or very good year, similar to the U.S., but more than twice as many Canadian as American businesses put themselves in the very good category.