“The gradual turnaround in Europe is restoring business confidence," says IDC

Worldwide tech spend to hit $2 trillion this year

Overall tech spending is set to increase four per cent this year to $2.04 trillion, down from last year’s five per cent, says analyst IDC.

The slight dip is due to the "slowdown in key emerging markets" such as China and Russia. 

However, IDC predicts that in 2014 a rebound in China and continued momentum in the US and Europe will see the industry return to growth of more than five per cent (reaching $2.14 trillion).

Half of this year’s growth is due to continued strength in smartphone and tablet shipments. Excluding mobile phones, IT spending will increase by 2.6 per cent rather than four per cent.

More than a quarter of a billion smartphones shipped worldwide in the third quarter of 2013, with the market growing 44 per cent year-on-year, according to Canalys.

IDC says enterprise IT spending has been tepid since last year, with weaker spending on PCs, servers and storage than previously expected. It estimates spending on servers, storage and enterprise networks will increase by one per cent in 2013 before accelerating to growth of four per cent next year.

“This has been a tough year for many IT vendors, with infrastructure spending in the first half of 2013 proving weaker than previously expected,” said Stephen Minton, VP for IDC’s Global Technology & Industry Research Organisation.

“The overall industry has been propped up by continued strength in mobile devices, especially smartphones, but the slowdown in emerging markets was another headwind for infrastructure-focused tech firms on top of government sequestration in the US and continued sluggish growth in Europe.”

In Western Europe, overall IT spending is on course for growth of two per cent this year (one per cent excluding phones). IDC expects this recovery to continue next year, with spending growth of three per cent, driven mainly by strong sales of commercial software. 

“Momentum in developed economies has been broadly positive since the start of 2013,” added Minton. “The gradual turnaround in Europe is restoring business confidence, leading to a strengthening of our assumption that next year will be better than this year for most IT vendors."

Image source: Shutterstock

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