IT spending varies widely between vertical sectors

IT spending by discrete manufacturing companies in Western Europe will decline by 3.1% to $32 billion in 2003, says IDC. But in 2004, spending will start to rise at a compound annual growth rate of 3.4%, to reach $36.7 billion by 2007.

Companies’ spending patterns will vary according to their size, says IDC, and the large number of small companies in this sector will depress spending growth. “The market is made up of a very high percentage of smaller organisations that will be very cautious with future investment overall, as they continue to suffer due to the manufacturing environment,” explains Jennifer Thomson, research manager for the European IT Opportunity: Manufacturing service.

  • Western European Banks will increase their IT spending by a compound annual growth rate of 7% from 2002 to 2007, according to IDC forecasts. The research company says the banking environment is settling down now that strong cost-control measures have dissipated worries about huge losses, risk exposure and shrinking margins. It forecasts that banks’ IT spending will rise from $37 billion in 2002 to $52 billion in 2006.

    “Efficiency remains the first objective of bank IT investments,” says Daniele Bonfanti, program manager, European IT Opportunity, Financial Services. “As a consequence of their strong cost-cutting policies, banks have realised that the only way to keep their operational costs under control is to strongly rely on IT. However, to ensure that IT adoption is effective, a different approach to IT investments is required involving a more structured IT budget allocation process.”

  • The Western European healthcare sector will spend about $5.2 billion on IT in 2003 and will experience an 8.3% compound annual growth rate between 2003 and 2007, according to IDC. The research company says a major driver of this growth is the need for healthcare organisations to comply with national and European Union plans for modernising IT in healthcare.

    “The Western European healthcare sector is undergoing fundamental transition,” says Massimiliano Claps, a senior research analyst at IDC. “Hierarchical and inward looking structures will be replaced by leaner, patient-oriented organisations that provide citizens with healthcare services through efficient and continuous preventive care rather than costly in-patient treatments.” IDC also forecasts that growth will vary between countries, at least in the short term. For example, IT spending will grow faster in the UK than in many other countries because comprehensive plans to modernise the NHS are already in place.

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    Ben Rossi

    Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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