UK firms slash IT investment

Software spending is down across all sectors

UK firms are continuing to slash spending on hardware and software, as IT bears the brunt of business cost-cutting measures.

According to the latest figures from the Office for National Statistics (ONS), spending on hardware and software was cut back drastically in the first three months of 2009.

And while businesses have reined in capital expenditure across the board, investment in IT has plummeted even faster.

According to the ONS, in the three months to March 2009, overall business investment totalled £33.38bn – 7.6 per cent lower than the previous quarter and 9.7 per cent lower than the same period a year ago.

During that time spending on software slumped to £1.52bn, which was 11.5 per cent lower than the previous quarter and 9.5 per cent lower than the same quarter in 2008.

Similarly, spending on hardware totalled £1.54bn, down 13.8 per cent from the previous three months and nine per cent lower than a year ago.

Software spending was down across all the sectors that the ONS measures, while hardware spending patterns were more varied - slight increases in spending in the distribution services sector were offset by huge quarter-on-quarter drops in hardware investments elsewhere.