IT spending will rise faster than inflation

Although suppliers may be shedding IT jobs, corporate users still plan to spend an extra 11% on permanent staff this year - five...

Although suppliers may be shedding IT jobs, corporate users still plan to spend an extra 11% on permanent staff this year - five times the level of inflation.

These findings from the latest six-monthly Computer Weekly/Kew Associates IT Expenditure Survey give weight to findings from recent user surveys that recruitment and retention of good staff is by far the most pressing priority for IT directors.

Overall IT user spend is expected to increase by 8.2% this year to £60.2bn, a drop from last year's 11.9% growth rate.

The report, based on user budget data together with 3,000 responses from a user survey conducted in June, indicates that the current problems this slump is causing in the IT supply industry will start to reverse next year, with spend growth rising 8.6% in 2002 and then 11.7% to £73bn in 2003.

IT spend per employee is set to rise from £2,476 this year to £2,650 next year. After the computer services sector, which is spending £16,660 per head on IT, the energy and water supply industry spends the most at £13,255 per capita. That leaves the banking and finance sector in third place at £12,574 per head.

The public sector is bucking the trend, fuelled by government cash for getting services online. Growth here is expected to hit 12.9% to a total of £11.5bn by 2002.

The sector provides good IT value for money, to judge by the £1,783 per employee spent on IT this year. Of that, the public sector spent £85 per employee on IT security, compared to just £52 per head on e-commerce.

Across all sectors, users this year will spend £3.9bn on e-commerce and £3.3bn on IT security. E-commerce spend will rise 40% to £5.5bn in 2002, while IT security will grow at 25% to £4.1bn.

Medium-sized companies will enjoy the fastest growth in e-commerce. Organisations with 100-499 employees will grow their spend on e-commerce by 72%, from £0.4bn to £0.6bn. That size of organisation is also growing fastest with IT security, although at a slower rate - 31% growth.

Further reading
The IT spending game

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