Gartner: global IT spending isn’t as rosy as expected

Gartner: global IT spending isn’t as rosy as expected

The global spending on IT products and services is expected to reach US$3.7 trillion this year, a 2.5 percent increase from 2011.

The new forecast marks a decline from Gartner’s previous estimate of 3.7 percent growth in IT spending for 2012. The tech analyst firm attributed the lower growth rate to the recent strengthening of the U.S. dollar against other currencies, rather than lower IT spending.

In fact, if U.S. currency exchange rates remain constant, IT spending is set to increase 5.2 percent in 2012, up from Gartner’s earlier projection of 4.6 percent.

Gartner research vice president Richard Gordon said in a statement: ”Despite ongoing concerns about the global economic recovery — most notably around the resolution of eurozone sovereign-debt problems , worries about the potential for China’s real estate ‘bubble’ to spillover and affect the rest of the economy and rising oil prices — early signs in 2012 suggest that the global economic outlook has brightened a little.”

Governments around the world are also expected to spend less on IT in 2012 and 2013. Gartner said this is driven by austerity measures in Europe , where there has been calls for cuts in government spending since the sovereign debt crisis emerged. U.S. government spending on IT is also expected to be flat this year, before contracting in 2013.

Small and mid-sized businesses (SMB), the bedrock of many economies, will continue to be a key driver in IT spending this year. SMB spending represents about a quarter of all enterprise IT spending and is expected to reach US$874 billion this year before hitting the US$1 trillion mark by 2016.

In particular, IT spending by mid-sized businesses will outperform other sectors in each of the next five years, thanks more spending on enterprise software, Gartner said.

The growing demand for mobile devices and positive outlook for enterprise network equipment is also expected to bolster the worldwide telecoms market. Spending on telecoms equipment, including application acceleration equipment, network security, WLAN and Ethernet switches, is expected to reach US$472 billion in 2012, a 6.9 percent increase from 2011.

Earnings by Singapore’s infocomm industry is expected to remain stable for the first quarter this year, according to the Business Expectations Survey conducted by Department of Statistics Singapore. 14 percent of firms surveyed expect lower operating receipts, though a majority of firms predicts no change from the previous quarter. Manpower is also expected to remain stable with a majority of firms expecting headcount to remain the same.

Photo credit:  Images_of_Money , licensed under  Creative Commons C Attribution 2.0 Generic

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