Global IT industry to return to growth this year

The sector will recover in 2010

The global IT industry is likely to come out of recession in 2010 with public sector and utility spending being the recovery's chief driver, according to a report from Pierre Audoin Consultants.

The public sector and utilities are both expected to show a spending rise of over 3 per cent in the period, with spending in the banking, insurance and transport sectors all expected to rise by 1 per cent.

Non-public sectors showed a decline of at least 2 per cent last year, with the retail and manufacturing sectors both showing drops in spending on IT of over 5 per cent.

However public sector spending is now likely to drop as countries ease back on stimulus spending, according to Arnold Aumasson, Senior Consultant at PAC Paris.

"The public sector has been very resilient in most countries in 2009 as federal investment programs have supported demand; however municipalities and regional governments face decreasing tax income and most countries’ debts will be a heavy burden for the years to come," he said.

Utilities are benefiting from some industry specific issues such as liberalisation, unbundling, information management, smart grid and smart metering projects, according to the report.

Meanwhile the situation in banking will remain highly differentiated from country-to-country, depending on the level of government aid and the structure of the industry.

Retail will remain a very difficult market in most countries, especially those dominated by discount retailers, which spend less on IT.

Overall, the recovery is expected in the second half of 2010. But the PAC report says average prices and rates will be lower than in 2009 even if spending volumes do recover.