Global IT spending to drop 6%, says Gartner

Worldwide IT spending will decline 6% compared with last year, according to analyst firm Gartner, with the total spend dropping from $3.4 trillion to $3.2 trillion.

The forecast is a revision of Gartner’s previous estimate in March that this year would see a 3.8% drop, as a result of continued weak IT spending and fluctuating exchange rates.

Hardware would see the steepest decline in 2009, the analyst firm said, with an expected drop of 16.3%, while software spending would drop only 1.6%.

“The full impact of the global recession on the IT services and telecommunications sectors is still emerging, and forecast growth in these areas has been further reduced significantly,” says Gartner’s head of global forecasting, Richard Gordon. “Moreover, the rise in the value of the US dollar against most currencies in recent months will have a material downward impact on 2009 global IT spending growth, which by convention we report based on US dollars.”

Meanwhile, a report from the Organisation for Economic Co-operation and Development (OECD) suggests that the worst of the recession may have passed for the global IT industry, “There are signs of recovery, with the rate of
decline bottoming out and turning up in the most recent cyclical data (May/June 2009), with positive month-on-month growth for most countries, and inventories running down sharply” the report says.

The exhaustive report looked at a number of economic indicators for the health of the IT sector.

The semiconductor industry, for example, saw “a modest month-on-month upturn since March 2009 [which] suggests that demand is beginning to stabilise, albeit at substantially lower levels than one year earlier and some commentators see a return to growth towards the end of 2009,” the report says.

In the US, venture capital funding for ICT companies has held relatively well compared to other industries.

“The most recent US data show that ICT venture capital has held up moderately well, and the share of ICTs in total venture capital remains stable at around 50% even if it has declined from over 75% at its peak in the Internet bubble.”

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