Israel’s information technology services market totaled $1.214 billion in 2002, 9.3% less than the $1.34 billion in 2001, states a new IDC Israel report. IDC cites the following factors for the drop: smaller enterprise IT budgets, especially by small and medium-sized private companies; the drop in GDP; less investment in Israel; the ongoing state of war; and competition between IT services companies that led to lower sweeping lower prices in the sector. IDC states that 2002 was the third consecutive year in which Israel’s IT services market shrank. IDC predicts that the market will expand by a modest 2.7% over the next five years to $1.386 billion in 2007. IDC revised its forecast from late 2002, which predicted only a 2.7% drop in Israel’s IT services market in 2002, compared with a year earlier. IDC attributed the difference the worse than expected recession in 2002.