IT spend to grow slowly in 2006

Analyst survey reveals sluggish market expansion

European companies will increase their IT spending by just three per cent in 2006, predicts analyst Gartner.

This figure represents an increase of half a per cent on the spending growth of two and a half per cent predicted for this year, according to the research published last week.

Gartner research vice president Roger Fulton says that even these spending predictions may be optimistic.

‘My experience of previous years is that whatever companies say they are going to spend on IT in the next year they will end up spending less, a trend that has persisted since the dot com bust. Since then, market demand has consistently been very, very tight,’ he said.

Highest spending growth is predicted in Germany, Spain and Portugal, each with a rise of six per cent. The UK comes slightly behind, with forecast growth of just under four per cent.

Among the lowest spenders is France, where growth of just half a per cent is expected, while in the Benelux countries spending is set to fall by two per cent.

‘Government spending in the UK has been pretty phenomenal, and it accounts for 17 per cent of the country’s overall IT expenditure, with the financial sector taking up another 22 per cent,’ said Fulton.