Study: BTB Spending Will Reach $5.4 Trillion by 2006

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Online commerce will account for 36 percent of all U.S. business-to-business spending by 2006, said a report released yesterday by Jupiter Media Metrix.


BTB commerce will total $5.4 trillion in 2006, up from an estimated $466 billion this year, according to "B-to-B Spending by 2006: Awaiting the Spending Inflection."


Jupiter said analysts have found that the automotive industry has taken advantage of evolving Internet technologies during the economic slowdown and is positioned to lead the turnaround in BTB spending growth.


Other key findings include:


· Decreasing discretionary software and service spending has contributed greatly to a decline in BTB commerce.


· Discretionary software and service spending and BTB infrastructure spending will rebound as the U.S. economy turns around; and the computer/telecom equipment, aerospace and defense, motor vehicles and parts, metals and mining, and chemicals industries will see the strongest share of their commerce shift online by 2006.


"The current sluggish growth in online B2B goods commerce can be attributed primarily to a slowdown in spending on discretionary software and services by the Global 2000 companies," said Jon Gibs, an analyst at Jupiter Media Metrix. "Manufacturers should look to the automotive industry to see growing trends in B2B commerce. Evolving Internet technologies, the slowdown in new car sales and fierce competition among automakers are forcing manufacturers to connect electronically with their trading partners and end-customers to stay competitive."


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