IT spending in the UK will pick up next year and the country will
remain Europe's biggest customer for IT goods and services,
according to analysts Forrester Research.
UK IT spending dropped 6.2% in last year, according to Forrester,
from £33bn to £30.6bn, a smaller drop than in most other European
countries.
The UK's large number of IT vendors and the UK's role as a
springboard for US technology are expected to drive the
recovery.
Europe-wide, IT expenditure will dip to 0.7% growth in 2002 and
flatten out to 7% annual growth in 2004 because of slow population
growth, years of excessive demand for IT skills, and low
penetration of the Internet.
"In spite of economic unity, Europe's IT sector doesn't have the
flexibility - as seen in the US sector - needed to get back to
double-digit growth after the 2001 dip," said Forrester senior
analyst, Charles Homs.
"With an average population growth of 0.3% per annum, European
consumers' technology consumption simply can't keep up with the
Americans." Homs added.
Europe's IT bubble - excessive IT spending compared with the normal
growth trend - equalled £20.2bn in 2000, compared to £29.3bn in the
US.
This IT overspending will hit the recovery curve of all European
regions, Forrester said. The UK will recover in 2003 to remain
Europe's biggest IT spender, according to Forrester.
Germany is predicted to lose ground, but will remain Europe's
second biggest market; France will not recover until 2004; and
Southern Europe is expected to outperform the rest of the
continent.