PracticeConsultingIT spending set to recover, says IDC

IT spending set to recover, says IDC

IT spending in Europe has bottomed out, and the beginnings of a gradual recovery are appearing, according to IDC's monthly index of technology expenditure across Western Europe.

IDC has increased its 2002 growth forecast for annual IT spending in Western Europe from 6.4% in January to 6.6% in the newly released February update. This marks a recovery from growth of 5% during 2001, and growth will accelerate to 9% in 2003 in line with overall economic recovery.

Stephen Minton, director of IDC’s European IT Markets Centre, said: “After the spending downturn of 2001, there are now leading indicators of an imminent rise in demand.”

In the new forecasts, the fastest-growing market in Western Europe in 2002 will be Sweden, where the market is expected to rebound with an 8.1% increase in IT spending. Strong growth is also expected in France, Italy, Finland, Spain and the UK. The weakest markets will be Germany, Austria, Belgium and Switzerland.

“In central Europe, the downturn in the German economy has affected IT budgets,” said Minton. “But even here, we see positive signs of a gradual recovery, with business confidence beginning to improve. While our forecasts are heavily dependent on economic factors, the improvement in the US economy will also have a positive impact on European prospects.”

Minton added: “The myth that over-spending on IT, the so-called bubble, will deflate IT demand for the next two years, will be put to rest as the economy recovers. Continued innovation, new technology platforms, clear ROI on technology spending, wireless and broadband roll-out, and centrality of e-business to the wider economy, will make increases in IT spending an unstoppable force.”

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