Global IT Spending Slows to a Crawl

The global economy is still in growth mode, but the rate of expansion is just not as good as economists and researchers would like, according to a recent research report from {complink 7426|Gartner Inc.} showing a tepid 3 percent rise in projected IT spending for 2012.

In the report, Gartner said it expects worldwide spending on computers, information technology equipment, enterprise software, and services will rise to $3.63 trillion in 2012, up from $3.52 trillion in the preceding year when the market grew about 8 percent from 2010. Of the five sectors computed by Gartner, only one is forecast to record double-digit gains, while all the others are likely to post anemic results.

Demand for telecom equipment, Gartner said, will increase in 2012 to $377 billion, up a torrid 10.8 percent from $340 billion in 2011. That growth rate pales beside the 17.5 percent increase recorded in 2011 over the prior year, but it still leaves the sector well ahead of the remaining four segments. Sales in the telecom services segment are seen barely rising to $1.69 trillion from $1.66 trillion, up 1.4 percent. The remaining three sectors aren't that much better: sales in IT services will grow 2.3 percent to $864 billion from $845 billion; computing hardware up 3.4 percent to $420 billion from $404 billion; and enterprise software up 4.3 percent to $281 billion from $269 billion.

“While the challenges facing global economic growth persist — the eurozone crisis, weaker U.S. recovery, a slowdown in China — the outlook has at least stabilized,” said Richard Gordon, head of research at Gartner, in the report. “There has been little change in either business confidence or consumer sentiment in the past quarter, so the short-term outlook is for continued caution in IT spending.”

With only about six months left to the end of the year, it is likely the Gartner numbers will hold up fairly well for 2012. Next year may be a completely different story. The research company is predicting an improvement for 2013 with growth for all IT spending expected to reach $3.79 trillion, up 4.4 percent from this year. However, these numbers may change dramatically depending upon the direction of the global economy and the comfort level enterprise executives have with their operations.

3 comments on “Global IT Spending Slows to a Crawl

  1. mfbertozzi
    July 11, 2012

    It sounds good Bolaji, speaking for myself it seems there are still strategies to be agreed with real things. In fact several  are sustaining “digital agenda” as one of the best way for recovery economy, but investments in the sector, as reported within your article, are still facing with a flat condition. Hope something will happen soon for boosting again.

  2. bolaji ojo
    July 11, 2012

    The market isn't shrinking but the growth is slowing. I was actually surpised demand is as strong as it is considering it's half of the year already and the global economy remains weak. I believe next year's performance will be strong.

  3. mfbertozzi
    July 11, 2012

    Well, I hope so, for both workers and companies. Quite hard to say it right now, even indicators from Gartner are telling about something very promising. Maybe the positive ramp next year will be various and depending from country to country.

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