15 August 2002 The European IT market has entered its first phase of recovery, according to analysts IDC. It says that spending in Western Europe will grow by 4.4% in 2002, rising to 6.2% in 2003. That compares to an estimated growth rate of 3.4% in 2001.
The current weak outlook has been exacerbated by accounting scandals and a number of high profile bankruptcy protection filings. However, this has clouded many analysts’ judgement, according to senior analyst Vicky Hawksworth at IDC.
“IDC is upbeat about the underlying fundamentals and long-term prospects of the Western European IT market and believes the market is now entering the initial phase of recovery, having reached its lowest point in the fourth quarter of 2001,” said Hawksworth.
However, it may take up to six months for vendors to start feeling a sustained improvement, as business profitability slowly improves and restrictions on corporate IT budgets are eased. It will, therefore, take until early 2003 for the recovery to fully feed through into the marketplace.
Across Europe, Hawksworth expects to see a uniform improvement in growth – with the exception of Germany, where economic conditions have been particularly poor. Particularly strong growth is expected in Ireland – after a decline in 2001. “Sweden will enjoy the highest growth in the region, increasing by 8% and Finland, France, Italy and the Netherlands will also see stable growth at 6% each,” said Hawksworth.