Global IT spending remains subdued

The effects of the slowing U.S. economy are being felt around the world when it comes to IT spending, say analysts at IDC.

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By  Matthew Southwell Published  July 26, 2001

The effects of the slowing U.S. economy are being felt around the world when it comes to IT spending, say analysts at IDC. Although North America has been worst hit, worldwide IT spending growth continues to hover around the 9% mark due to the downturn.

"As the United States remains the largest single portion of the worldwide IT market, the continued impact of a slowing economy will make itself felt on the total worldwide market," says Stephen Minton, program manager for IDC's Worldwide IT markets and strategies programme.

"However, current forecasts do not point to a worldwide slowdown on the same scale as North America. While there is undoubtedly a decline in the growth of spending in 2001 compared to 2000, this is expected to be less severe in international markets than the U.S. slowdown," he adds.

According to IDC, IT spending will remain steady in Western Europe, increasing 11% annually from 2001 to 2005. The software market is expected to shoulder much of the growth in this region, with software spending expected to increase 15% in 2001. Total IT spending growth in Asia/Pacific will be a relatively subdued 8% in 2001; however, the hardware and services markets will rebound and growth will recover to 13% in 2002.

"This recovery is based not only on improving economic conditions, but also on a rapid Internet roll-out," says Minton.

Recovery will come in 2002, predicts Minton, with IT spending in the emerging markets looking most promising. Spending in the Middle East/Africa is predicted to increase 15% in 2001.

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