UK hardware spend falls to lowest level since records began

Hardware sales have slumped

Computer hardware spending by UK businesses has fallen to the lowest level since the government began keeping records of private sector IT investment in 2001.

In the second quarter of 2009, UK firms spent just £1.09bn on hardware purchases, down 30 per cent from the previous three months, when £1.54bn was invested. Twelve months ago, the quarterly figure was £1.46bn.

The figures reveal the depth to which companies are avoiding costly capital expenditure purchases on IT during the recession.

Software spending also fell to its lowest level since the third quarter of 2006, with firms investing £1.34bn in the second quarter this year, which was also down from £1.52bn in the previous three months and the same amount in the corresponding period last year.

The figures from the Office of National Statistics show that eight per cent of all private sector investment went on computer hardware and software, down from nine per cent in the second quarter of 2008.

The numbers also reflect the global decline in hardware spending as firms put off purchases of PCs and servers. According to analyst Gartner, worldwide hardware investment this year will slump by 16 per cent.

"While the global economic downturn shows signs of easing, this year IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings," said Gartner’s research vice president and head of global forecasting, Richard Gordon.