IT spending growing despite economy

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Doom and gloom about an economic downturn is yet to hit global IT spending, according to a new market report.

Around the world, the IT market will grow by 5.2 per cent to €963.5 billion (£766.7 billion) this year, according to data from the European Information Technology Observatory (EITO), a research group supported by UK trade body Intellect.

Growth will continue next year, as the group predicted a rate of 5.6 per cent – which would push global turnover for computers, services and software over the trillion euro mark for the first time ever.

“The weakening trend in the world economy has hardly affected turnover in the high-tech sector,” said EITO’s chairman Bruno Lamborghini in a statement.

Globally, services and software will have higher growth than hardware - above six per cent for both.

That split is echoed in the UK. This year, the UK will see an increase in spending on overall IT by just 1.4 per cent to £59.3 billion. But it can expect stronger growth in software and services, at 4.4 per cent and five per cent respectively.

“The UK ICT market is showing robust growth figures even in this uncertain economic period,” said Carrie Hartnell, transformational business programme manager at Intellect. She said that the 1992 downturn lead to IT budget cuts, but noted that this time around, IT is being used to help drive efficiencies.

John Higgins, director general of Intellect, agreed: “The technology industry enables other sectors of the economy to deliver a better performance in a time of belt tightening. Business are realising that technology-enabled processes can be a lifejacket in choppy waters, not a weight around their ankles.”

While the UK is keeping its head above water, emerging markets are booming. China, India and Russia can expect IT market growth rates between 17 and 18 per cent, EITO said, noting that their overall market size was still significantly smaller, with China maxing out at €39.1 billion, and Russia and India both under half that size.

Across the European Union, IT spending will grow by 4.2 per cent to €311.1 billion, with growth lead by Poland, the Czech Republic and Romania. Mature markets such as Japan and the US are still stable, with spending increasing by four per cent and 3.7 per cent respectively, and expectations for more momentum next year.

A report earlier this year from Gartner suggested IT budgets would hold steady at 3.3 per cent this year, while a survey of IT leaders showed they're not worried about a recession hitting their business.

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