2010 IT spending will be less than predicted

Analyst Gartner has lowered its forecasts

£2.2tn will be spent on IT in 2010, predicts Gartner

IT spend worldwide is set to total £2.2tn in 2010, marking an increase of 3.9 per cent from 2009, when £2.12tn was spent, according to analyst Gartner.

However, in the first quarter of the year, the research firm had expected spending to increase by 5.3 per cent. It has now lowered its expectations, blaming the devaluation of the euro against the US dollar since the beginning of the year as the primary reason for the reduced estimate.

“The European sovereign debt crisis is having an impact on the outlook for IT spending," said Richard Gordon, research vice president at Gartner. "The US dollar has strengthened against the euro during the second quarter of 2010, and it will likely continue to do so in the second half of 2010, which will put downward pressure on US-dollar-denominated IT spending growth."

Gordon added that in the longer term, public sector spending will be restricted in Europe as governments struggle to bring budget deficits under control during the next five years and to reduce debt during the next 10.

"Private sector economic activity will also likely be hindered because of the direct impact of austerity measures on key government suppliers and the indirect impact caused by the 'ripple effect'. An effective policy response will be critical to stimulate investment in general and in IT in particular," he said.

More-detailed analysis on the outlook for the IT industry will be presented in Gartner’s complimentary webinar "IT Spending Forecast, 2Q10 Update: Growth in an Age of Austerity" at 4pm BST on 6 July.