Global IT spending to drop as telecoms and services fade

Worldwide IT spending is set to fall by 6% this year as the dual problems of recession and exchange rates continue to impact the market. Analyst firm...

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Worldwide IT spending is set to fall by 6% this year as the dual problems of recession and exchange rates continue to impact the market.

Analyst firm Gartner, has revised its predictions of an overall decline of 3.8% from the first quarter upwards, as tough conditions continue to eat into spending.

A drop of 6% means total worldwide spending on IT will drop to $3.2 trillion from $3.4 trillion in 2008.

Although many economists believe the recession has entered a levelling off period before the recovery starts problems with confidence persist and are undermining the willingness of customers to spend.

"While the global economic downturn shows signs of easing, this year IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings," said Richard Gordon, research vice president and head of global forecasting at Gartner.

The decline in spending growth in both hardware and software had almost stabilised but the "full impact of the recession on the IT services and telecommunications sectors is still emerging," he said. As a result growth in those sectors was being revised downwards.

Hardware has been hardest hit with a 16.3% decline in spending and flat sales predicted for 2010, followed by services with a 5.6% drop and telecoms with a 4.6 reduction. This leaving software as the brightest area with a small dip into the red of 1.6%

A version of this story originally appeared on Microscope.

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