Growth in IT spend falls to 7%

There will tighter belts all round this year as IT spend growth is set to drop to 6.9% this year from 2001's 8.4%, the fourth...

There will tighter belts all round this year as IT spend growth is set to drop to 6.9% this year from 2001's 8.4%, the fourth successive annual drop and the lowest rate of growth in nearly a decade.

However, the actual size of the pot of spend that IT directors have in their budgets is still growing, up from £60.3bn in 2001 to £64.5bn this year, and growth in the IT budget is 3.5 times those of directors of other departments such as marketing or sales have.

These are the findings from the latest Computer Weekly/Kew Associates six-monthly user IT expenditure survey, which tracks the spend intentions more than 60,000 UK user IT budget-holders each year.

Average IT spend per employee for all UK industry sectors will rise from £2,480 in 2001 to £2,615 this year. In 2001 British companies typically spent an average of £605 per employee on hardware, £348 on software and £667 on IT-related services.

Despite the dotcom crash, spend on e-commerce infrastructure is growing steadily, with a 7% growth expected this year, taking that market up from £3.39bn last year to £4.8bn in 2002.

Large organisations (with more than 500 employees) will have just 3.7% growth this year, and are slowing their IT spend much faster than smaller ones which look set to enjoy a 10.7% growth in spend.

The public sector is the fastest growing vertical sector, at 12.3% growth expected this year.

According to the report, users will spend more money from their limited budget on IT hardware and software and rein in on IT services. In particular, hardware suppliers should enjoy a trebling in growth - from 2.6% in 2001 to 7% this year.

In particular, PC hardware suppliers can expect a leap in IT spending for their sector, rising sharply from just 1.1% growth last year to 10.0% growth this year. The market for PC and hardware suppliers will be worth £9.8bn in the UK for 2002.

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