Only economic catastrophe will quash IT spending growth in private sector


Only economic catastrophe will quash IT spending growth in private sector

Karl Flinders

Barring an economic disaster, the global private sector will increase IT spending in 2013 before a sustained recovery, but government spending will see a continuing decline.

Gartner predicted global IT spending by enterprises would rise by 2.5% to reach $2.68tn in 2013, with banking among the fastest growing sectors.

Following “scant” growth this year, there are signs that next year will see more substantial growth, said Gartner.

But the government's IT spending will drop by 2% in 2012, and the decline is expected to continue next year, according to Gartner.

The banking sector will see an increase of 3.5%, reaching $460bn. The biggest spending sector, manufacturing and natural resources, will increase spend by 2.3% to $478bn in 2013.

Gartner said the increased spending would materialise if Europe and the US could avoid economic problems.

"The global economic outlook has deteriorated in 2012, leading to scant overall growth in enterprise IT spending," said Kenneth Brant, research director at Gartner. "However, our third-quarter outlook points to more substantial growth in 2013, if significant fiscal crises are avoided in the US and Europe, and in subsequent years.”

Businesses cannot reduce spending further, so unless there is a major economic downturn spending will increase, he said.

“Most organisations have already significantly cut discretionary IT spending growth over the past several years and, barring a global economic catastrophe and significant contraction of operations, they have little room to reduce IT spending further over the long run," said Brant.

Because senior executives in business are demanding technologies such as social, mobile, big data and cloud, an increase in spending is expected

The fastest growing sectors will be transportation and insurance, which will see IT spending increase by over 4% in 2013.

Image: Adam Gault/DigitalVision/Thinkstock

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