Cisco sent a shudder through the financial markets last night after it warned that its growth was slowing down. Long seen as a bellwether of the industry’s health, the networking giant’s outlook is sure to spur concerns that IT spending is dwindling in the teeth of concerns over the macro economy.

John Chambers, chief executive of Cisco, noted that January sales had been below expectations in Europe as well as the US. That statement clashed with the statements made by many technology vendors that have suggested that robustness in other regions will take the edge of any slowdown in US spending.

Chambers was also wary of saying whether or not his company’s situation was evidence of a lack of confidence on behalf of business decision makers. “I don’t think anybody really knows, including the key decision makers,” he said.

This is the second successive quarter that Cisco has disappointed investors but it is far from conclusive that the company’s issues are emblematic of a wider malaise. Indeed, other leaders in the sector including IBM, Microsoft, Oracle and Seagate having recently reported strong numbers.

Gartner forecasts that enterprise IT budgets will be up 4.9 per cent this year.